In a long and detailed article, Orebech investigates the current status of the still-unresolved Icesave dispute. The analysis is understandably complex and he acknowledges that Iceland has repeatedly promised to pay the money back; even though the terms of the repayment deal have still not been negotiated to all sides’ satisfaction.
In investigating the current situation and how it sits with Europe-wide banking rules, Orebech comes to the conclusion that because national EEA depositors’ insurance funds are financed directly by the banking industry, there is no public liability for their insufficiency in the event of a bank folding. While such funds may take private or public loans to cover the shortfall, that is not the same as a national government taking on the debt to overseas depositors directly and passing that burden directly on to its taxpayers. In fact, he says, such an arrangement directly interferes with free competition and is thus against the law.
As has been the case throughout the Icesave saga, it appears that EU law was not created to take into account the failure of a large overseas branch operating from within a small national banking industry backed up by few taxpayers. The regulation 0.15 percent payments into the Icelandic depositors’ insurance fund could never have hoped to cover the failure of Icesave (and all the other major banks) and ongoing payments into the fund to pay back the debt now (from the country’s much reduced banking sector) would take far too long.
The full article can be read on mbl.is here – but please return to this article on IceNews to leave reader comments.
Related Posts: Iceland's Icesave debt: how much is too much? Icesave time running out for Icelandic government EFTA: Iceland must pay Icesave Is Icesave affair as important as it seems? EU commissioner gives Icesave new face
Share IceNews:
Source: IceNews, Daily news from Iceland
0 comments:
Post a Comment