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Saturday, 21 March 2009 18:21 |
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 The FSA has taken over SPRON and the savings banks and their operations ill be moved to other financial institutions. SPRON will be trasferred to new Kaupthing and the savings banks to the central bank of Iceland. The operations of other savings banks will be insured. This is what the minister of trades, Gylfi Magnusson said at a press conference today.
The liquidating committee will be set over SPRON and it is clear that some of the employees of SPRON will lose their jobs but some will be hired at New Kaupthing. The clients of SPRON will, as said at the meeting, automatic access to their balances and receive other bank service of the new Kaupthing. The same is about the clients of the Netbanki.
No liquidating committee will be set over the savings bank (Icebank) as his operations are done differently. The payment method of the bank will be moved to the central bank. It is expected that the bank will be going into a traditional moratorium.
Gylfi said that the government had decided to take systematic action to protect the interest of the clients of the saving banks and insure bank service everywhere in Iceland. By these actions have they put strong foundations under the continued operations of the savings banks and given the chance of taking part in the reconstruction of the economy.
The government iterates that the balances of the domestic banks and savings banks and their branches are insured in full.
Gylfi said that SPRON and the savings banks had been operating on exemption for the past months regarding equity. The companies have had a loan from the central bank of Iceland with the conditions of that an agreement is reached with the lenders about the solution of the equity problem of the companies for receiving equity contribution from the national treasury. Also the condition was set that a fulfilling mortgage would be set forward to reduce the risk of the national treasury. Gylfi said that they had been in discussions with the lenders about the possibility of refinancing the debts but the liquids fund position just kept on worsening. So it was inevitable to infeltrate the operations of SPRON and the savings banks.
"I would have liked to see a different ending to this. SPRON and Icebank are institutions that should have lived on. Unfortunately there were not grounds for that and so this has gone this way. Our thoughts are with the employees," said Gylfi and said that he hopes for that these problems are solved in a positive manner. He stated that some part of the amployees of SPRON will be moved over to the new kaupthing but that will never be a large part.
Gunnar Haraldsson, chairman of the new board of the financial supervisory adminisration said at the press conference that because of the problems regarding the equity and not least the liquid finance position of these two financial institutions created a great risk in the system, of the opinion of the FSA and the central bank of Iceland. There were attempts to solve this but the conclusion was that these emergency arrangements had to be done since no other way was available. He mentioned that the FSA had received a letter from the boards of SPRON and savings banks where they recommended that their operations would be taken over.
Insured the operations of the savings banks
Gylfi said that actions would be taken to insure the operations of the eleven savings banks. Those are Byr, Sparisjodur Bolungarvik, Sparisjodur Hofdhverfinga, Sparisjodur Keflavik, Sparisjodur Myrarsyslu, Sparisjodur Nordfjardar, Sparisjodur Sudur-Thingeyinga, Sparisjodur Strandamanna, Sparisjodur Svarfdaela, Sparisjodur Vestmannaeyja and Sparisjodur Thorshafnar. The minister said that the government thinks so that with the appropriate arrangements the continued operations of these savings banks would so be insured.
According to the emergency law is the government authorized to set forward all up to 20% equity to the savings funds. Six have already requested this assistance.
Gylfi said that with these actions were stronger foundations set under the bank system and the expenses of the national treasury within the limits that the national budget authorizes. He could not mention any fnial numbers about the expected expenses.
"We belief that by doing this have be so mostly seen the end of the shocks that tumbled upon us last fall," said Gylfi Magnusson.
It is expected that the discussions about the arrangements will be held at the parliament on Monday.
News Article by noname
Translated by Anya
Original Article in Icelandic
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