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Central Bank to Compile Report on Kaupþing Loan

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Central Bank to Compile Report on Kaupþing Loan

Money - Icelandic Króna

Photo: Páll Kjartansson

Governor of the Central Bank of Iceland Már Guðmundsson intends to compile an official report on the lending of Kaupþing bank ISK 80 billion (USD 603 million, EUR 530 million) on the same day that an emergency law was passed just prior to the economic collapse in October 2008, ruv.is reports.

The emergency law enabled the government to stage an extensive intervention in Iceland’s financial system—the most radical economic measures that have ever been taken in the country’s history.

The granting of the loan was one of the largest unresolved events of the collapse.

In yesterday’s Reykjavíkurbréf, an opinion piece written by the editor of daily Morgunblaðið on Sundays, the author, assumed to be co-editor and former Central Bank governor Davíð Oddsson, suggests that Geir Haarde, who was prime minister and chair of the Independence Party at the time, granted the loan. Davíð spoke with Geir shortly before the decision was taken to grant the loan.

According to Össur Skarphéðinsson, who was Minister of Industry for the Social Democrats, the Independence Party’s coalition partner, at the time, the granting of the loan was never discussed in the cabinet.

Earlier this month, the Supreme Court of Iceland upheld prison sentences issued by Reykjavík District Court in December 2013 on four former key executives and majority owners of Kaupþing in the so-called Al-Thani case in what is the heaviest sentence ever given in Iceland for economic fraud.

The four were charged with market manipulation in relation to Sheik Mohammed Bin Khalifa Al-Thani of Qatar’s acquisition of more than five percent of shares (worth ISK 25.7 billion) in Kaupþing Bank shortly before it collapsed in autumn 2008.

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