Stock Exchange Criticizes MP for Bloomberg Comments

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Stock Exchange Criticizes MP for Bloomberg Comments

Director of the stock exchange in Iceland, NASDAQ OMX Nordic, Páll Harðarson, criticized Social Democrat MP Sigríður Ingibjörg Ingadóttir for commenting on the financial problems of the Housing Financing Fund (HFF) to Bloomberg.

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Photo by Páll Stefánsson.

Among comments made by Sigríður in the interview, which appeared online yesterday morning, was that the HFF, which is state-run and the country’s biggest mortgage lender, would have to “renegotiate the terms of its debt.”

Consequently, HFF securities were placed on a trading halt.

Páll told visir.is that Sigríður’s comments had been “unfortunate” given her position of decision-making on the fund’s affairs—Sigríður chairs the Alþingi parliament’s Welfare Committee.

The stock exchange must now discuss with parliamentarians and ministers the importance of “being careful when making comments on registered securities,” Páll stated.

“It’s simply something that must be done. Because in light of comments by such an influential person regarding decision-making on the affairs of the HFF, we saw reason to doubt whether there was equal position between players on the market,” he elaborated.

In an interview with national broadcaster RÚV, chair of the Icelandic Pension Funds Association Þórey S. Þórðardóttir supported Páll’s arguments.

Sigríður defended her comments to Fréttablaðið. “I did not have information on internal trade. Everyone who wants to know and has followed the affairs of the HFF know that the settlement of payment is its biggest risk.”

She dismissed the harsh criticism as herd behavior. “The reaction is strange given that ISK 50 billion have fallen on the state treasury and thereby the public because of the HFF. The problem is not caused by my comments but this fact.”

Later in the day, the government decided to contribute ISK 13 billion (USD 103 million, EUR 80 million) of the budget to the HFF so that it would fulfill demands on equity. However, no decision was made regarding new terms of debt or canceling the state guarantee for the HFF.

Click here to read Bloomberg’s coverage of the HFF’s affairs.

ESA