IMF warning in April

IMF warning in April

By Alex on Mar 2, 2009 in Finance and Business, Iceland, MBL, Politics

The International Monetary Fund (IMF) sent a message to the Icelandic government in April last year saying how important it was to react effectively against the problems of having a too-big banking sector with very light regulation in the country.

mbl.is reports that this information came to light in an interview with Ingibjorg Solrun Gisladottir, Social Democratic party chairman, in a television interview last night.

Gisladottir said that the Central Bank of Iceland and the Financial Supervisory Authority did not put enough energy into responding to the subsequent government warnings. Gisladottir said that reports by professional economists, including from the other Nordic countries, had been building up prior to the economic collapse warning of the significant problems in the financial sector. She goes on to say that she, like everyone else, did not expect the near total banking collapse that eventually took place.

http://www.icenews.is/index.php/2009/03/02/imf-warning-in-april/

Capital control not lifted at the present time

By Alex on Mar 2, 2009 in Finance and Business, Iceland, International, MBL

According to the Rules on Foreign Exchange, no. 1130/2008, the Rules must be reviewed no later than March 1, 2009. After considering the necessary preconditions for lifting the capital controls, the Central Bank of Iceland has decided that these have not been sufficiently established.

The next review of the Rules on Foreign Exchange will occur no later than September 1, 2009, as is stated in the Act on Foreign Exchange, no. 87/1992, with subsequent amendments. The Central Bank of Iceland regularly assesses the effectiveness of the controls as part of its overall monetary policy and is formulating a strategy for their gradual, systematic removal. An assessment of the fulfilment of requirements for capital account liberalisation is also one of the subjects of consultation during the current IMF 1st Review Mission.

http://www.icenews.is/index.php/2009/03/02/capital-control-not-lifted-at-the-present-time/

02/03/2009 | 12:00

Few Cases Land on Desk of Iceland’s Special Investigator

Ólafur Th. Hauksson, who was appointed specifically to investigate the events leading up to the collapse of Iceland’s banking system and as special prosecutor, said he and his team are becoming impatient and want to investigate more and larger cases.

Hauksson told Morgunbladid that only few cases have been sent to his desk from supervisory institutions since he took office at the beginning of last month, but that he is expecting an increased flow of cases soon.

The financial district in Reykjavík. Copyright: Icelandic Photo Agency.

The authority of the special investigator will be extended if a new bill on his office will be passed, which will grant Hauksson easier access to information and documents at institutions such as the Financial Supervisory Authority (FME).

In Hauksson’s opinion the regulations need to be clearer in terms of his office’s relations to other institutions. “We’ve had good relations with most institutions, but in case of doubt they delay the work of my office and, truth be told, I don’t have much time.”

After two years the office of the special investigator will be reviewed, closed or merged with other offices. However, in Hauksson’s opinion, the projects that will be allocated to his office are likely to take longer than two years.

The special investigator said he had expected larger cases to be sent to his office immediately. Lack thereof could be explained by the fact that not much time has passed since the banks completed their auditors’ reports.

However, the office has a few “concrete” cases that are currently under investigation and might lead to a public investigation. Four individuals have been hired to the office full time and a special taskforce might also be appointed.

http://icelandreview.com/icelandreview/daily_news/?cat_id=16539&ew_0_a_id=320667