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Claimants of Collapsed Banks Accept Terms

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Claimants of Collapsed Banks Accept Terms

Glitnir

Glitnir, one of the collapsed banks. Photo: Páll Kjartansson.

The claimants of the collapsed Icelandic banks have agreed to the conditions introduced by the government of Iceland in order to guarantee economic stability when the capital controls—which have been in place since the banking collapse in 2008—will be lifted.

The government presented its plan to lift capital controls yesterday. The conditions include that compositions must be concluded by the end of this year, otherwise the banks’ estates will be subject to a so-called ‘stability tax’ of 39 percent.

The winding-up committee of Glitnir Bank issued a statement yesterday saying that claimants had taken part in negotiations with the government about the stability conditions, Fréttablaðið reports.

The committee’s chair, Steinunn Guðbjartsdóttir, said on RÚV’s news magazine Kastljós yesterday that she welcomed the government’s introduction of the conditions. “It is very pleasing and good to be able to meet the conditions and complete the winding-up process. I believe that this is a big step for everyone.”

Minister of Finance Bjarni Benediktsson confirmed that negotiations with claimants had been part of the process. “The talks have to some extent helped to finalize, or develop, the stability conditions.”

Laws on financial companies will be amended. However, Bjarni stressed that the government would never have budged from its goals of keeping funds in the country and extending loans.

Bjarni, Prime Minister Sigmundur Davíð Gunnlaugsson and Central Bank Governor Már Guðmundsson all emphasized that funds created in the process of lifting capital controls are to be used for maintaining stability.

The full scope of the measures concerns ISK 1,200 billion (USD 9.0 billion, EUR 8.1 billion) comprised of the assets of the bankrupt estates of the collapsed banks, worth ISK 500 billion; foreign claims of the bankrupt estates, worth ISK 400 billion; and offshore foreign-owned assets in ISK, worth ISK 300 billion.

The measures may cut the nation’s debt of ISK 1,450 billion by half.

For further information, here is a link to a statement in English issued by the Ministry of Finance following yesterday’s press conference.

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