So, the Black Report is officially OUT and the press conference held to go over its contents is finished.
I have to confess that writing about it here feels a bit overwhelming, as you can imagine. After all, it’s 2000+ pages and so much mind-boggling information.
In short, there was nothing earth-shattering in the report — nothing we didn’t already know or hadn’t heard rumours about. Essentially that the banks were completely out of control, their misuse outrageous, and the incompetence of the government and regulatory agencies staggering.
And even though we knew much of this stuff, there is something important about having it all documented in a single, comprehensive report — a report prepared by a committee as independent as can be expected under the circumstances. It is definitely a milestone in the processing and reconstruction so necessary for this nation.
And it will be very interesting to see what happens now — i.e. whether the perpetrators will finally be brought to justice. And whether the Icelandic judicial system is strong enough to cope.
[PS - the Black Report is now being read out in its entirety by actors at the Reykjavík City Theatre. Webcast here.]
{ 21 comments… read them below or add one }
Yes, lets very much hope this is not another report written for the archives. And, lets hope the outcome wont be an italian “non paga nessuno”. But that’s of course up to the special prosecutor, not the special investigation.
Hopefully, M.
The level of corruption is stunning.
For instance Landisbanki loans to Bjorgolfur Thor one of its owners amounted to more than half of its equity or 55 billion.
Massive loans to Icelandic MP’s, journalists, media owners, and friends of the banks with little or no collateral.
The politically connected hardly ever get what’s coming to them, unless you assume that lots of mony is what they deserve.
More circus for the masses, nothing else but circus for the masses.
My prayers are with the people of Iceland today. I read the summary, and I am concerned that the Report stops short of calling the actions that bankrupted your country “criminal.” I believe the harshest words they used were “negligence” and “reprehensible”. I am concerned these are weasel words that will be used as a defense to any criminal action against the thieves (or a defense to even bringing charges). I have not read the entire Report, so maybe it says that elsewhere.
I share Nancy’s concern.
This concern was raised repeatedly at the press conference this morning. The answer was very clear: the investigative committee had no basis or authority to conduct a criminal investigation. That is the job of the Special Investigator, and it’s already been presented to him.
I think the committee is being purposely vague. However, I think they got their message across very well and no one has any illusions about the role of the perpetrators.
A short addendum to my earlier message and other comments above:
The website (www.sic.althingi.is) was to publish english sumaries of various parts of the report. The site stated for example that chapters 2 and 21 would be posted later today afternoon. When calling Althingi I was advised that the “Webmaster faces unexpected problems,and the texts will only be posted tomorrow afternoon. The website has now (at around 18.00) ben updated to this extend. I can’t figure out if there are technical problems or issues with content or … ?
Throughout the day I heard the report was important to ‘enhance understanding’ and to ‘foster closure’. In my reading thats a diplomatic formula exclusive to serious consequences.
The main good news (tbc) I got today was that the Special Investigation Commission allegedly met with the Special Investigator.
M.
It is also interesting that the committee specifically lists the members of government and ministries that failed to carry out their duties or appeared to be negligent, but to find the names of bankers, financiers and other private parties you have to pick them up here and there scattered through the report.
An executive summary of the no-collateral loans, stock buy backs and other fraudulent conveyances, with names and dates, would have been more effective.
I’d tune in to a reading of the list of unsecured loans with names and dates and the pace escalating into 2008…
Hm, it would be a good crowd-source project to get the list of suspiscous or irregular loans, buyout and cross-investments, with names, amounts, dates, and whether the there were any smileys attached.
I started reading the extracts in english. Those assets/lending bubbles usually happen in countries where the population is not white, fair-haired and blue-eyed. Yet the results are the same. The level of incompetence of regulators more accustomed to regulate whaling and fisheries and the brazeness of the abuse of the mechanisms of financially developed countries, which invented banking in the 16th to 18th century as opposed to stumbling on it on the way back from a trip to the volcano are flabbergasting. Iceland deserves its predicament 10 times over. Good luck with the retrenchment on traditional values and activities.
Fraudsters usually have to escape to a foreign criminal haven willing to harbour them but, in Iceland, they have no need to emigrate. Instead, years after their crimes, the country merely publishes a report. No convictions. The Icelandic fraudsters must be grateful they don’t live in a country that prosecutes criminals like them.
I take Alda’s point about the limits of the committee’s mandate, but my concerns, like Nancy’s, are about the lack of strong enough language to imply a reasonable basis for criminal charges. I am afraid that as things stand it will be all too easy for clever legal mercenaries to deny that there are even charges to answer, and that the conclusions of the committee will not even be admissible as evidence.
One must hope that “incompetence” and “irresponsibility” are words used here to describe only what is on the politically-correct surface of the matter, and that the criminal component – which we all know about – will be adequately handled by the special prosecutor – and soon. As Steingrímur says: “Robbery is what it was, and robbery shall it be called.”
Thanks for the updates during the press conference.
I’m still waiting for the English summary (chapter 2) to become available, which is supposed to happen tomorrow according to Althingi’s website. It would be interesting to know about those “unexpected difficulties” they are stating.
Watching the tv tonight I am just getting sicker to the stomach seeing all these guys playing chicken – “it wasn´t my fault – the other guy should have done something” – “everything I did during my time as …. was well above and beyond the call of duty – I did all that I could… it was so and so that should have done something….” I think though, unfortunately there will be very little to come out of this in terms of anyone being called to take a stand and to pay back. Particularly the Björgólfurs and other bank owners and managers… just reading the amounts of their bonuses is just amazing… These people should be shamed, openly and publicly humiliated og sett í einelti – but then the human rights commission would probably step in and save them… URGH!!! am so angry and frustrated!!!!!
Observer — Those assets/lending bubbles usually happen in countries where the population is not white, fair-haired and blue-eyed — Hm. Not all Icelanders fit that description. My daughter, for example, is 50% Negro. Would you like to clarify your point? Or perhaps you could just illustrate your racist remark more clearly?
“The level of incompetence of regulators more accustomed to regulate whaling and fisheries and the brazeness of the abuse of the mechanisms of financially developed countries, ”
Please stop swallowing the line that it was mere incompetence that allowed this Ponzi scheme to be perpetrated. The banks were bribing everyone in sight with billions of ISK ‘loans’ . MP’s, political parties, all the newspaper owners – they were paid to keep quite. The bank owners were robbing their banks and ferreting the money off to tax havens. The staff at the regulator were syphoned off into the banks – this is simply another sort of bribery.
“Observer — Those assets/lending bubbles usually happen in countries where the population is not white, fair-haired and blue-eyed — Hm. Not all Icelanders fit that description”
Ponzi banking schemes are, almost always, a white on white crime.
They are always perpetrated by people who are most like you – and the most susceptible victims of the scheme are ignorant and basically racist.
I do like how Observer managed to condescend Iceland, Icelandic culture, traditional Icelandic values, fisherman, non-whites, and banking regulators in both Iceland and the rest of Europe.
European banking wasn’t “designed”, but was formed out of the wreckage of thousands of failed banks, hundreds of sovereign defaults, dozens of wars, and several conquered nations, over the course of 400 years.
Icelanders were just as qualified to run a banking system as anyone else. Everyone has been using the same economics textbooks for decades, and I bet a fair number of those bankers went to nice American and European universities. Ethnographic explanations of Icelandic banking failure ring just as hollow as the successes did in the “Viking Raider” phase.
Here’s how this is being reported in Britain:
Iceland lifts lid on banks ‘excessive loans’ to billionaires
Iceland’s banks gave “excessive” loans to a handful of powerful billionaires, including Robert Tchenguiz, the property entrepreneur, Jon Asgeir Johannesson, the retail tycoon, and Bjorgolfur Gudmundsson, the former owner of West Ham FC, according to a damning inquiry.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7583268/Iceland-lifts-lid-on-banks-excessive-loans-to-billionaires.html
This can’t all be negligence! There must have been criminality too, surely?
It’s interesting to watch Google News with an “Iceland” search in effect.
So far I’ve seen opinion pieces from two other countries that were envious of Iceland. They wish that their own countries would or could conduct that kind of investigation and publish the results.
Not agreeing with Observer on all, but on financial practice, here is from the official presentation made in Iceland, i did not make this up, nor did Observer. “Other countries with relatively large financial systems manage to avoid disastrous banking outcomes, since, unlike Iceland, those nations have long experience and proven ability to supervise large, international banks. Their accumulated reputation for careful prudential supervision therefore offsets their inability to provide fully reliable lender of last resort protection, at least to some extent
–FME was in general understaffed and lacked experience.
–FME did not enforce the legal provisions which were at their disposal”