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How to become the least popular kid in the schoolyard

Brief addendum to my last post about the illegal car loans tied to foreign currencies. It turns out that it is not just the Icelandic banks who are behind the finance institutions issuing car loans in foreign currencies. Deutsche Bank, for instance, is the largest creditor behind Lýsing, one of the main auto financing companies here in Iceland.

Meaning that if Lýsing goes bust, Deutsche Bank suffers the losses.

Which is just great, isn’t it? As if it wasn’t enough to have the British and Dutch mad at us, now the Germans are going to be pissed as hell, too.

HFF!

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  • John March 14, 2010, 11:10 pm

    Do know if any Norwegian companies is involved( being an Norwegian that would be interesting to se how the goverment of Norway handles)? And the house loans are they legal?

  • Marko March 14, 2010, 11:27 pm

    Not really. It will be Americans. Approximately 45% of the shares in DB are owned by American investment banks 🙂

    Fun and joy living in Iceland.

  • Bromley86 March 15, 2010, 12:21 am

    >now the Germans are going to be pissed as hell, too

    And they probably weren’t feeling all that charitable to start with after their near miss with their Kaupthing version of Icesave.

  • Andrew (the other one) March 15, 2010, 4:34 am

    When I did an Internet search for “Lysing”, without the accent, I got this from the medical dictionary:

    Lysing – ” to cause or produce disintegration of a compound, substance, or cell”.

    That accent makes all the difference. Or could we rewrite it as “destroys financial security, well being and social cohesion”. Just a random thought.

    Let us hope this does not bring down all the finance houses concerned. Otherwise a loan from the Germans might be needed too. Ouch!

  • Joerg March 15, 2010, 7:52 am

    Don’t bother too much – if this gets noticed at all in Germany, it will make Deutsche Bank a little bit more unpopular, not the Icelanders.   

  • Eliza March 15, 2010, 8:49 am

    Housing Finance Fund ?

  • Chris March 15, 2010, 8:59 am

    I don’t feel sorry for them. If they are making business that way, they have as well to pay for the losses they cause.

  • Flygill March 15, 2010, 9:51 am

    Now we see why the Icelandic courts were so eager to strike down foreign currency car loans — anything that screws over foreign creditors is politically acceptable and indeed desirable.
    Will the Icelandic courts strike down indexing of home mortgages and allow relief of borrowers through bankruptcy? No of course not, because then the Icelandic banks would lose.
    But wait a minute, if Iceland can somehow manage to convince the foreign creditors of Arion (nee Kaupthing) and Glitnir to take physical possession of these banks (right now the foreign creditors refuse to do this), then, voila, home mortgage indexing will be ruled illegal and/or the home mortgages must be written down.

  • alda March 15, 2010, 9:57 am

    Flygill – Negative. Of the three car financing companies in Iceland, three are owned by the Icelandic banks. Only one by Exista, which was recently taken over by Deutsche Bank.

  • Michael Lewis March 15, 2010, 10:25 am

    I used to work for Deutsche, albeit not on the retail bank side. I’m pretty sure, given the sums involved, I doubt many people at Deutsche would notice if these defaulted, let alone outside of the company.