In late September 2008, Glitnir bank was in serious trouble and turned to the Central Bank for help. Davíð Oddsson was then CB director, and decided to nationalize Glitnir.
The Investigative Committee has ruled that, on this specific point [as well as others] Oddsson showed negligence in the line of duty. Indeed, it has been widely said that the nationalizing of Glitnir prompted an immediate run on the other Icelandic banks [whether or not they could have been saved anyway is open to debate – I think probably not].
At this time, one Tryggvi Þór Herbertsson was advisor to Prime Minister Geir H. Haarde. At a private meeting with Davíð Oddsson, Tryggvi Þór expressed doubts about the wisdom of Doddsson’s plan.
The report quotes Tryggvi Þór:
I had just begun when he went berserk, said I was undermining his recommendations and said: “The prime minister [Haarde]is sitting out there and shaking like a leaf in the wind and can’t make a decision. He listens to you and you’re undermining this. If this does not go ahead I will personally make your life miserable here in Iceland for the rest of your days.” He also said I should not mess with Össur [Skarphéðinsson, Minister for Foreign Affairs], or he would come after me. He was rabid, to put it mildly, and I was completely taken aback. I responded by saying that we had been comrades for many years and my only thoughts were for the future of our country. At this he calmed down a bit, but I could see that he was fuming.
A few days later, Tryggvi Þór stepped down as advisor to Geir H. Haarde.