Government Takes Control
On 8 October 2008, the UK's FSA transferred the UK deposit accounts to ING. In its statement, "The FSA has determined that Kaupthing Singer & Friedlander no longer meets its threshold conditions, and is likely to be unable to continue to meet its obligations to depositors...The FSA concluded that KSF is in default for the purposes of the Financial Services Compensation Scheme".
On 9 October 2008, the Icelandic Financial Supervisory Authority took control of Kaupthing after the resignation of the entire board of directors. This came about when "Britain transferred control of the business of Kaupthing Edge, its Internet bank, to ING Direct and put Kaupthing's UK operations into administration" placing Kaupthing in technical default according to loan agreements. The prime minister of Iceland, Geir Haarde, has stated that the British government brought down Kaupthing unnecessarily by abusing their power.
The same day the EBK (Swiss Federal Banking Commission) started proceedings under the Swiss Deposit Insurance scheme with respect to the Geneva branch of Kaupthing Bank Luxembourg. EKB requested customers of that branch to contact them so that compensation of up to 30000 Swiss Francs could be paid.
In Finland, the Financial Supervision Authority (Rahoitustarkastus) took control over the Finnish branch to prevent funds being transferred to Iceland. It has said that it believes that no one will lose their money. Finnish branch paid all its liabilities to its customers with debt it got from three major Finnish banks. Finnish branch then liquidated all of its assets and paid back debt to the Finnish banks. According to Finnish authorities Kaupthing Edge ended its operations in Finland on 30 January 2009.
WikiLeaks has made available an internal document from Kaupthing Bank from just prior to the collapse of Iceland's banking sector, which led to the 2008–2009 Icelandic financial crisis. The document shows that suspiciously large sums of money were loaned to various owners of the bank, and large debts written off. Kaupthing's lawyers have threatened Wikileaks with legal action, citing banking privacy laws. The leak has caused an uproar in Iceland and may result in criminal charges against the individuals involved.
Read more about this topic: Kaupthing Bank
Famous quotes containing the words government, takes and/or control:
“The worst enemy of good government is not our ignorant foreign voter, but our educated domestic railroad president, our prominent business man, our leading lawyer.”
—John Jay Chapman (1862–1933)
“Helicon: “It takes one day to make a senator and ten years to make a worker.”
Caligula: “But I am afraid that it takes twenty years to make a worker out of a senator.””
—Albert Camus (1913–1960)
“There has been something crude and heartless and unfeeling in our haste to succeed and be great. Our thought has been “Let every man look out for himself, let every generation look out for itself,” while we reared giant machinery which made it impossible that any but those who stood at the levers of control should have any chance to look out for themselves.”
—Woodrow Wilson (1856–1924)