BIRD2008
Your reply is full of internal contradictions - you claim they had enough money for ALL their commitments, but the money frozen in the UK was only a miniscule amout of the money of British investors and did not even cover the minimum amounts required by law !
Quote :
When it came to financing the investments of british investors because of Landsbankinn it was a bit problematic. Landsbankinn had lots of assets both in Britain and in Iceland. If that would be sold that would cover the money invested in the bank according what we are told here. But selling them at the moment was very difficult, not to say the least. There was so little cash flowing in the system and it would not be in any interest to sell them for 20% of their value, then nobody would get their money back.
The Icelandic government was trying hard to solve this problem. What I'm pointing out is that the British government did not help. Od course they were trying to secure the investment of their people, BUT was what they did really neccessery. Your point of view is I guess mostly based on what you read in Britain and what the government tell you there. Mine is of course mostly based on what I read here. 
This act of freezing the assets in Britain let to the fall of Kaupthing. I have that from pretty secure source working in Kaupthing. Friend of mine is working there and he told me that the bank could have survived. The freezing of all the money cancelled short time loans the bank had which were going to be used to get him out of the mess. Kaupthing has actually charged the British government for the freezing of its assets because it was not bankrupt when the laws were set, the laws let to the fall of the bank.
unquote
Look at what you have written and the basic fact that there isn't enough money to pay off the basic legal requirements in the UK, let alone elsewhere. Your friend is carefully ignoring the fact that inter-bank lending had gone into crisis mode and that NO ONE was lending to Icelandic banks. All the Icelandic banks and Government was doing was trying to repatriate funds to Iceland to ILLEGALLY preferentially pay-off Icelandic investors.
It is no good trying to say
"oh ! are investments are really worth 5 times more than we can get for them" - that ISN'T how things work ! and really shows how badly ALL banks have been behaving (not just Icelandic). This is the way children talk - not financiers.
The facts are out in the open, especially the way the Icelandic Prime Minister tried to mislead Darling in the phone call !
It really should be for the Icelandic people and media to call-out their government and Banks on the facts that have beenpresented rather than hide behind a game of blaming others when illegal acts have been uncovered.
Go back to your friend and ask him how, and from whom, did the banks think they were going to get more loans when they were taking their foreign investors' funds away from them to stockpile in Iceland ?
I think you, and your friend need to ask some very simple questions as to how the Icelandic banks intended to operate when they had insufficient assets and noone willing to loan to them.
The Icelandic banks and government should take responsibility for their actions and not try to blame others.
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