At a meeting in Harpa concert hall today, the creditors of Kaupþing Bank agreed to pay ISK 120 billion (USD 937 million, EUR 839 million) in stability contribution in order to be exempt from capital controls, RÚV reports. They also agreed to create a lack-of-damage fund for the winding-up board and its advisors to cover the cost arising from possible lawsuits related to their work. The idea is that money will be kept in the fund for up to ten years.
The creditors agreed neither to sue the Icelandic state nor the Central Bank of Iceland because of the agreement.
The idea for the lack-of-damage fund came from Glitnir Bank winding-up board. “It’s meant to ensure that the individuals in charge of the estate, the winding-up board and other employees, will not be held personally liable for decisions made during the winding-up proceedings,” says Steinunn Guðbjartsdóttir, head of the Glitnir Bank winding-up board. The amounts are very large. “The assets in question are over [ISK] 1,000 billion [USD 7.8 billion EUR 7 billion].”
The majority of Glitnir Bank creditors have agreed to pay the Icelandic Treasury more than ISK 200 billion(USD 1.56 billion, EUR 1.4 billion) in stability contribution and also to fulfill demands for debt pooling.
The Kaupthing Bank winding-up board applied for exemption from capital controls in mid-September. That exemption was needed to be able to adhere to an agreement made in connection with the government’s plan for the easing of capital controls.