Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Fed Too Late To Prevent US Real Estate Market Crash? - 22nd Aug 19
Retail Sector Isn’t Dead. It’s Growing and Pays 6%+ Dividends - 22nd Aug 19
FREE Access EWI's Financial Market Forecasting Service - 22nd Aug 19
Benefits of Acrobits Softphone - 22nd Aug 19
How to Protect Your Site from Bots & Spam? - 21st Aug 19
Fed Too Late To Prevent A US Housing Market Crash? - 21st Aug 19
Gold and the Cracks in the U.S., Japan and Germany’s Economic Data - 21st Aug 19
The Gold Rush of 2019 - 21st Aug 19
How to Play Interest Rates in US Real Estate - 21st Aug 19
Stocks Likely to Breakout Instead of Gold - 21st Aug 19
Top 6 Tips to Attract Followers On SoundCloud - 21st Aug 19
Holiday Nightmares - Your Caravan is Missing! - 21st Aug 19
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19

Market Oracle FREE Newsletter

The No 1 Gold Stock for 2019

Iceland Votes No to Repaying Icesave Debt to Britain and Netherlands

Politics / Credit Crisis 2010 Mar 09, 2010 - 03:10 PM GMT

By: Andrew_G_Marshall


Best Financial Markets Analysis ArticlePeople in Iceland have rejected their government's pledge to repay a debt of more than US$5 billion left by the collapse of Icesave Internet bank. 93 per cent of people voted “no” in a referendum.

Less than two per cent supported the repayment of the debt, which is due to be paid to the UK and Dutch governments, which had compensated the investors who had lost money.


Andrew Gavin Marshall from the Center for Research on Globalization says the public should not have to shoulder the burden of mistakes made by banks.

“The bailout would be for roughly US$5.4 billion, which would go to the Dutch and the British depositors in Icesave, which was the largest online bank that went under,” Marshall says. “And this is basically asking the Icelandic people to pay for the bad debts of their bankers and the bad regulations of their government. And it’s sort of endemic of this corporatist economic undertaking that is going on around the world, where the private debt has become a public obligation. So you privatize profit and you socialize the risk.”

Andrew G. Marshall is a Research Associate of the Centre for Research on Globalization (CRG). He is currently studying  Political Economy and History at Simon Fraser University. 

Andrew G. Marshall is a frequent contributor to Global Research. Global Research Articles by Andrew G. Marshall

© Copyright Andrew G. Marshall , Global Research, 2010

Disclaimer: The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Centre for Research on Globalization. The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible or liable for any inaccurate or incorrect statements contained in this article.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


10 Mar 10, 09:42
Souvereign debt default.


Basically this a souvereign debt default, as the Iceland Gouvernment guaranteed the first 20.000 EUR of deposits in icelandic banks.

They did this so that their banks had access to EU countries. Unfortunately they were "a mite" lax in their oversight on these same banks, and now refuse to honour their pledge.

The old: "you broke it, you bought it" seems to "you broke it, the neighbour has to pay for it"

I expect this to have some severe repercussions for Iceland.

10 Mar 10, 09:45

Btw, the "investors" angle surely distorts the perception.

As Iceland was only liable for the first 20.000 EUR, most of the real investors will be left out in the cold anyway.

Those who get hammered now are those who found a nice 5% interest savings account for their money.

The real hardcore "mom and pap" type of "investor"

10 Mar 10, 22:34
Iceland Votes No

Financial markets will also vote no whenever Iceland seeks to borrow money. Why should anyone lend a country money that it will not repay ?

11 Mar 10, 03:22
Foreigner's risk

I don't really see why Icelanders (who, BTW had NO say in what their countries banks were doing) should be on the hook for FOREIGN investments. If you were to put $10,000,000 in the bank of Fiji, do you seriously think Fijians should cough up for you if that "investment" goes belly up? The citizens could do NOTHING to stop you investing that money, their banks from taking it, and subsequently bankrupting themselves - yet they are now somehow responsible for these speculative losses???

12 Mar 10, 01:43
Reply to Maarten

Well Maarten,

That depends, if the fijian gouvernment promises to guarantee that 10 million (btw nice exaggeration, only by a factor 50) then yes. The "people of Fiji" have committed themselves through their representatives.

Now some cases may be said that dictatorial regimes do not represent their people, but Iceland is not such a regimes, but a democraticaly elected gouvernment. As such they de facto and de jure represent their people.

As such Icelanders had their say in what the banks were doing, as their regulator, The National Bank, had duty of oversight and regulation over their banks. And the national bank is under oversight of the gouvernment.

Suppose you have a dog, and your child/wife/etc goes walking the dog. The dog gets of the leash somehow and attacks a mailman. Now do you think for one moment that you are not liable for the damages? "Because i had no say in what the dog was doing?"

Any judge will rightly point out that:

a) it was your dog

b) it was your appointed overseer (i.e. dogwalker)

So you should have educated the dog -> i.e. behavour school

and/or educated the overseer -> how to treat dogs.

Similarly here.

Even worse, the icelandic gouvernment could have NOT signed an agreement in which they guaranteed the first 20K of saving deposits. But then their banks would not have had access to the EU.

So the icelandic gouvernment chose to sign to such guarantee so that their banks could play. And now they choose to renege on their word and signature.

Oh returning on your 10 million: so iceland was only liable for the first 2%. The next 2% was Dutch/UK (though i am not sure about the UK guarantee level) liability and the rest would own risk. so a 96% exposure. But then someone that has 10 million to invest should be wiser than run such a risk.

That first 20k can justifiably be soon more as "savings" than "investment".

Savings for things like: "Suppose my washing machine breaks down. I'll need a new/other care in a few years"

Then there is another aspect. At least in the Netherlands, these savers did not deposit their money in a foreign bank.

They deposited money in a dutch branch of a foreign bank.

The difference may seem small, but in reality is huge.

For example had they had to bring their money to iceland, no problem would have existed.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules