So, the two Björgólfurs finally broke their silence this weekend.
Morgunblaðið had a three-page interview with Björgólfur Sr. – who as well as being major owner Landsbanki was also Chairman of the Board – under the heading “My Most Difficult Experience.” In this interview he works overtime trying to deflect blame from himself and onto anyone else that it will stick to. It’s outrageous and in my view completely obliterates any goodwill he may have had among the Icelandic people [read: YT].
However, those three pages are comparatively tame in comparison with a snippet of highly interesting information that Björgólfur Jr. has just come out with concerning the Icesave accounts.
In an interview with the news magazine Kompás, set to be broadcast in full this evening, he gives his account of the reason the Icesave accounts were not transferred over to the British authorities.
The way he tells it, the day before the emergency legislation was passed here in Iceland, which allowed the Financial Services Authority to intervene in the operations of all the Icelandic banks, British authorities offered to take over all of Landsbanki’s Icesave accounts. Up to that point the Brits had been reluctant to cooperate with the Icelanders, but there was a complete turnaround on October 5 when they offered to move Icesave out of Icelandic jurisdiction within five days. However, this was on the condition that Landsbanki provided GBP 200 million as a guarantee.
According to Björgólfur Jr., Landsbanki was given until noon the following day to come up with the funds. The bank turned to the Central Bank of Iceland for a loan, against – as he puts it – “the best possible collateral.” In his words, Landsbanki had an adequate amount of liquid funds but they were in Icelandic kronas and the bank needed foreign currency.
However, no one at the Central Bank responded, despite repeated phone calls by the Landsbanki people that morning. At 12.30 that day, the CBI came back to them with a refusal.
This, according to Björgólfur, explains the harsh reaction by Alistair Darling two days later. Darling’s interpretation, presumably, was that since Icelandic authorities had not provided Landsbanki with the guarantee they had no intention of honouring their obligations concerning the Icesave accounts.
Fréttablaðið has sought comments on this from several high-ranking officials here in Iceland, including a CBI governor, the PM, the Minister of Finance, Minister for Foreign Affairs and others, but none have commented save for the Minister of Industry, who remarked that he didn’t recall any of the ministers receiving a request for a loan at the time. However, the Central Bank would have to answer for itself.
A lecturer in economics at Reykjavík University, however, calls this information highly interesting, particularly in view of the fact that the CBI had refused to provide a loan to Glitnir a few days earlier. What he is alluding to is not clear, but personally I wonder whether the CBI refused Landsbanki simply to save face – because they couldn’t admit that not providing Glitnir with a loan had been a mistake. If this is true, it’s yet another startling, grave error made by the Central Bank in this entire disastrous debacle.
That’s what we have today – it’s sunny and clear, but cold with a bit of wind. At the moment we have-1°C [30F], sunrise this morning was at 8:56 am and sunset is due for 5:26 pm.
PS. I can’t tell you how much I appreciate the concern so many of you have expressed in the comments or by email. It’s really touching. Thank you. Also, if you have sent me an email in the last 2-3 weeks and I haven’t responded, please accept my apologies … I’ve received so many and a handful have fallen by the wayside as I’ve struggled to keep up. If you haven’t had a response in the last 10 days or so, feel free to write again and I promise I’ll get back to you. Ta.