Lögberg-Heimskringla - 01.02.2012, Side 6

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6 • Lögberg-Heimskringla • February 1 2012
News
Majority of Icelanders oppose
Euro
visir.is – More than half of
Icelanders (52%) are opposed to
adopting the Euro as Iceland’s
currency, according to a poll
conducted by MMR. 28%
are in favour of adopting the
Euro, and 20% neither favour
nor oppose this. The question
was: “How much are you in
favour of or opposed to Iceland
adopting the Euro as Iceland’s
currency?” These results show
a changed attitude toward
the Euro since right after the
collapse when a great majority
of Icelanders favoured adopting
the Euro.
PM open to splitting elections
in two
Frettablaðið – It is perhaps
too late to hold a national
referendum on a draft for a new
Constitution simultaneously
with presidential elections
in June, said Prime Minister
Jóhanna Sigurðardóttir (SDA)
last week. IP Chairman
Bjarni Benediktsson asked
Sigurðardóttir how such a
national referendum would
proceed, how it should be
organized, and what should be
voted on. He said he thought it
was completely unrealistic that
a parliamentary proposal on
a new Constitution would be
drafted from the Constitutional
Council’s proposals over the
next several weeks. Thus, it
would not be possible to present
it to the nation. The PM replied
that Alþingi’s Constitutional
and Monitoring Committee
was currently reviewing the
Constitutional Council’s pro-
posals, and that she hoped the
matter would proceed quickly
and be satisfactorily concluded
in the next several weeks. And
then, if she had her way, “a
parliamentary proposal on the
matter will be voted on in a
national referendum.”
Iceland shoots up Heritage
Foundation’s list
visir.is – Heritage Founda-
tion is a conservative US think
tank. Last year Iceland shot
up 17 places on the founda-
tion’s annual list of economic
freedom. The foundation rates
181 nations regarding, for ex-
ample, legal procedure, regu-
lations, size of the government
and openness of markets. Ice-
land’s combined score consists
of nearly 71 points, having in-
creased by nearly three points
since last year. This is the third
greatest increase on this year’s
list. Hong Kong is at the top of
the list.
Share of Íslandsbanki for sale
Frettablaðið – The
bankruptcy estate of Glitnir Bank
has put its share in Íslandsbanki
up for sale. This is stated in
a proposal on the payment
of priority claims from the
bankruptcy estate sent recently to
Glitnir’s claimants. Glitnir owns
a 95% share in Íslandsbanki,
which recently merged with Byr.
The proposal states: “There is an
ongoing process regarding the
possible sale of Glitnir’s share
capital in Íslandsbanki. It is not
known whether Íslandsbanki
will be sold in Icelandic krónur
or other currencies, or whether
it will be sold at all.” The Swiss
bank UBS has assisted Glitnir in
this sales process. Quite a few
foreign banks have expressed
interest in buying Íslandsbanki.
Rumoured among them are
Canadian and Norwegian banks.
Steinunn Guðbjartsdóttir, who
chairs Glitnir’s Winding-up
Committee, said that there was
nothing concrete regarding
the sale of Íslandsbanki. The
Winding-up Committee notified
its claimants that it intended to
pay all of the priority claims
against the estate before the
end of next month. This will
be the first payment to Glitnir’s
claimants.
Suit filed against Landsbanki’s
board
visir.is – Landsbanki’s
Winding-up Committee has
sued Landsbanki’s former
Board of Directors. The total
claims for damage are ISK 34
billion (US$ 269.9M) because
of the enormous capital outflow
from the bank the day before
it fell. The bank’s former
chairman and principal owner
Björgólfur Guðmundsson was
not named a defendant in this
suit since he was declared
bankrupt. The defendants are
Landsbanki’s former directors
Sigurjón Þ. Arnason and
Halldor J. Kristjansson and
members of the board Kjartan
Gunnarsson, Andri Sveinsson,
Þorgeir Baldursson and
Svafa Grönfeldt, along with
Jón Þorsteinn Oddleifsson,
head of Landsbanki’s Cash
Management. In addition to
these seven, the summons also
names insurance companies
issuing guarantees for the
bank’s directors and executives.
There are altogether 32 such
defendants, many of them
employees of Lloyd’s of
London and Brit Insurance,
Allianz, Liberty Mutual, QBE
and others. The summons
demands that the bank’s
management pay damages for
negligence that resulted in the
payment of substantial sums of
money from Landsbanki on 6
October 2008, the day that the
Emergency Act was passed,
the day before Landsbanki fell.
The summons states that on
this date considerable sums of
money were transferred from
the bank to Landsvaki Mutual
Fund, Straumur Burðaras Bank
– which was owned by the
same parties as Landsbanki –
and MP Investment Bank, the
old MP Bank. The Winding-
up Committee deems that
these payments substantially
eroded the value of the bank’s
assets when the directors
ought to have known that the
bank was in trouble, and the
bank’s claimants were also
discriminated against. The total
amount transferred out of the
bank on 6 October was ISK 34
billion. The summons states
that claims purchased from
Landsvaki were purchased at
a considerable surplus, and
payments to Straumur and MP
Bank were made after the prime
minister’s address announcing
the imminent collapse of the
Icelandic banking system and
the immediate closing of the
bank. All seven board directors
and executives are jointly
demanded to pay ISK 34
billion, which means that the
bank’s bankruptcy estate can
go after each and every one of
them for the total amount if the
suit is won.
Good to found companies in
Iceland
mbl.is – According to a sur-
vey of the World Bank, Iceland
is one of the 10 best countries
in the world in which to found
companies. The bank’s opinion
about Iceland stated that the
laws in the country to protect
investors have been improved,
for example, to make it easier
to obtain permits for trading
between related parties. This
was stated in the World Bank’s
annual report “Doing Busi-
ness”, as reported in the web
newspaper Huffington Post.
The survey covers 10 factors
determining how easy it is to
start operating companies in
each country – how easy it is
to obtain construction permits,
register assets, obtain loans,
pay taxes, etc.
Iceland leaps toward economic
optimism
visir.is – In a poll conducted
by Gallup International at the
end of last year in 51 states,
Icelanders made the fourth
biggest leap from pessimism
to optimism regarding the
economic situation. A recent
edition of Íslandsbanki’s
Morning Bulletin discussed
the poll’s findings. The poll
asked respondents whether
they thought that conditions in
the economy would be better,
unchanged or worse in 2012.
11% of those responding said
that the economic situation
would improve; 42% said
that it would worsen, and
46% said that it would remain
unchanged. So the difference
between those believing that
the situation would worsen and
those thinking it would improve
is -31 versus -51 percentage
points in the Gallup poll a year
ago. This leap of 20 percentage
points is the fourth largest in
Gallup’s findings.
Pension funds’ foreign assets
eroded
visir.is – According to a
recent edition of Íslandsbanki’s
Morning Bulletin, pension
funds’ foreign assets shrank
in August by nearly ISK 35
billion (US$ 277.8M), which is
7%. Foreign assets’ percentage
of the funds’ total assets has not
been lower in over six years.
The funds’ total net assets for
payment of pensions in August
were ISK 24 billion (US$
190.5M). At the end of that
month, net assets totalled ISK
2019 billion (US$ 16B). The
funds are still suffering from the
banking collapse. August was
an atrocious month on foreign
stock markets. This is the main
explanation for the shrinkage in
pension funds’ foreign assets
since most of them are tied up
in foreign mutual funds. The
S&P 500 Index fell by over
6% during the month, and
the Euro- Stoxx Index for the
same period dropped nearly
13%. In addition, the króna
strengthened in August by
1.5%, which of course erodes
the króna figures for the foreign
asset balance. Pension funds’
foreign assets at the end of
August totalled ISK 454 billion
(US$ 3.6B), corresponding to
22.5% of the funds’ net assets.
This proportion has dropped
steadily since the first part of
2010. It has not been lower
since the spring of 2005. The
above trend in foreign markets
continued in September. In
addition, the króna grew
slightly stronger. Thus, it can be
assumed that the funds’ foreign
assets continued to contract
last month. According to the
Morning Bulletin, this trend
will probably substantially
affect the funds’ desire to sell
their foreign assets in exchange
for State bonds in krónur in
the Central Bank’s offerings
especially since there is no
certainty on when the currency
restrictions will be lifted
sufficiently for them to resume
increasing their foreign assets.
Norwegian DNB Bank eyes
Íslandsbanki
visir.is – DNB Bank
in Norway is one of those
requesting information on
Íslandsbanki in connection
with possible purchase of the
bank. Since the start of 2010,
the Swiss bank UBS has
been supervising the sale of
Íslandsbanki on behalf of the
Winding-up Committee for
Glitnir Bank. DNB has actually
cooperated with Íslandsbanki in
the field of asset management;
an agreement between the banks
was signed on 1 December
2010. The asking price for the
bank has not been divulged, but,
based on its capital position, the
bank’s price can be assumed to
be not less than ISK 100 billion
(US$ 806.2M).
Reprinted with permission
from INB published KOM PR
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