Iceland: what ugly secrets are waiting to be exposed in the meltdown?

If you fancy a good  financial soap opera read this piece.

Click Here To Learn About Iceland, Its Meltdown, & Other Dirty Facts

(H/T To Joe Wiltsen for recommending this piece)

Tag Line: Almost a year since the collapse of the Icelandic banks, the rotten nature of these financial corpses is slowly beginning to emerge.

Introduction (Via Telegraph)

For months rumours of share-ramping, market manipulation, excessive loans to their owners and unusual transfers off-shore have been circling Kaupthing Glitnir and Landsbanki, whose failure last October left 300,000 British customers unable to access their money.

It has now become clear that this was no ordinary crash. Iceland’s special investigation into “suspicions of criminal activity” at the three banks is likely to stretch from Reykjavik to London, Luxembourg and the British Virgin Islands.

Excerpts (Via Telegraph)

So how did no one manage to spot that these banks were making precarious loans to benefit a very small number of people?….It is the ratings agencies and financial supervisors who must take the blame for failing to spot some tell-tale signs that some unusual activity was occurring, he claims.

But among the worst affected by the crisis are 10,000 savers with £840m tied up in Kaupthing in the Isle of Man and 2,000 savers with £117m in Landsbanki in Guernsey. All lost their entire savings with no compensation and are still waiting in line with a queue of commercial creditors.

He believes the root of Iceland’s problems that have now decimated its economy appear to have started when the government decided to privatise the banks in the early 1990s.

“Iceland got its regulations from the EU, which was basically sound,” he says. “But the government had no understanding of the dangers of banks or how to supervise them. They got into the hands of people who took risks to the highest possible degree.”

Click Here To Learn About Iceland, Its Meltdown, & Other Dirty Facts