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  1. #1
    Mid
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    Iceland: Thai-style croneyism

    Iceland: the land of cool turns bitter
    Roger Boyes
    October 9, 2008


    Iceland's financier-Vikings made their homeland trendy and wealthy - until the banking crisis left it with crippling debts

    The doughty Icelanders know that they have only squatters' rights on their volcanic island. White steam hisses and spumes its way through the thin crust of the earth; nature seems to be constantly irritated.
    Now, though, the feeling on this tiny, angry island goes beyond physical geography. The eruption in the global financial markets has hit Icelanders in an elemental way. Across the world, banks are going under or being given expensive life-jackets. In Iceland, which has let its banks run free, the country itself could go under. Even the Prime Minister, Geir Haarde, admits as much: “There is a very real danger, fellow citizens, that the Icelandic economy in the worst case could be sucked into the whirlpool, and the result could be national bankruptcy.”

    Suddenly an island with a population of 300,000, seen for the past decade as the essence of cool - a successful nation where people couldn't stop partying - is on the brink of becoming a failed state. That naturally worries the world - and Britain more than most, as Icelanders have bought into institutions such as Hamleys and Moss Bros, Karen Millen, House of Fraser, Whistles, Woolworth's and West Ham United. But for Icelanders it represents a psychological and moral crisis.

    Who to blame? How to survive? What did the islanders give up when they chased the money, forgot their roots and turned themselves into a Nordic Tiger?

    “We're furious. Livid,” says Svanur, who runs the Kaffibarin pub in downtown Reykjavik, over strong black coffee at the counter of his bar. The pub is famous for being once co-owned by Damon Albarn, the lead singer of Blur, one of several rock stars who thought that they had found peace on the island. “These people have been gambling with our life savings. What we need now is for a foreign bank to come in and give us proper banking services.” That view is shared around the pub, which is abuzz with gossip. “They've all taken flight - run away to the Cayman Islands,” sneers an electrical engineer.

    Around the corner at the Hotel 101 bar, once a bustling hang-out for Reykjavik's globalised money class, there is no one to be seen. With its long, purple-lit table, it looks rather like an overdesigned mausoleum.
    “It's Monday night, what do you expect?” says the churlish barman. “Actually,” I say, “it's Tuesday.” The barman shrugs and stops the photographer from taking shots of empty seats. Why? “Orders from the owner.” Who, for the time being, is Ingibjörg Pálmadóttir, wife of Jón Asgeir Jóhannesson, owner of the Baugur investment group and one of the tycoons who has been prudently absent from the island for a while.
    So how did the Hotel 101 - named after Reykjavik's most exclusive postcode - come to be the watering-hole of a financial elite? For centuries Iceland had a fish-based economy, even fighting a war with Britain to keep its lucrative cod trawling grounds. Then it began exporting aluminium, and then, after free-market reforms introduced by the Thatcherite Prime Minister Davěd Oddsson, it rapidly privatised its banking sector and moved into the business of financial engineering - to such an extent that a handful of Icelandic banks, expanding aggressively, have ended up with liabilities more than eight times the national GDP.

    That gold rush, at the beginning of this century, has spun the illusion of wealth. Dorrit Moussaieff, the jet-setting jewellerydesigner wife of President Ólafur Ragnar Grimsson, set the tone, with her coterie of girlfriends - Rannveig Rist, the general manager of Alcan Iceland; Tinna Gunnlaugsdóttir of Iceland's National Theatre; artists and gallery owners - all regulars at the now eerilly silent 101.

    But it wasn't just a wealthy elite who surfed the Zeitgeist. Ordinary Icelanders were swiftly freed from the idea that they belonged to an impoverished society where the key question about a future bride was: is she a good housekeeper? In the past five years, people's average wealth has grown by 45 per cent - and the money has gone into houses and cars, financed by 100 per cent loans based on a spread of foreign currencies. Now the krona is plummeting, loans are ballooning and thousands are defaulting. The only good news is for foreign visitors, for whom beer has at last become affordable.

    Some, like Kristian, who has worked in the fishing industry since he was 16, when he shipped fish to Germany, are philosophical about it all. Bad years, good years; boom and bust - that is nothing new for a fishing nation. “We've just forgotten about it - how we used to eat haddock and cod-tail because the fleshy, good cod had to be exported,” says the 53-year-old, seated on Reykjavik's tidy harbourside. Grizzled and articulate, he now drives a delivery van for some of his old trawlerman friends. “The priorities went askew in the past few years - we thought we could have jam on our bread every day of the week.”

    In fact, even the fishing industry has changed. “There were always secure jobs on the fleets, on the dockside and in the processing factories,” says Kristian. “Now all processing is done at sea, the fisherman returns maybe once every 45 days and the fish is already frozen, ready to be exported.” The effect: Reykjavik no longer smells of fish and seagulls no longer wheel around the docks in hungry squadrons. The capital has become almost genteel. The old town district has a freshly painted feel - a Max Mara shop looks like an overdressed intruder between wooden-slatted houses - and the rather bleak 1970s Reykjavik, with its architectural nods to Slough, has all but disappeared. Money has allowed a makeover.

    There are only a few tell-tale signs of trouble - the hole where the foundations for a new Landsbanki headquarters were to be sunk has been quietly filled and tarred over to form part of a car park. And the new Landsbanki-sponsored opera house looks as if it may not be finished.
    If there are still Vikings in this Iceland, they are the financial marauders setting out for Britain - not to pillage and plunder, but to snap up a chunk of French Connection.

    But now, suddenly, Icelanders have grasped that such activities do not represent the future of the island and, indeed, they could be its downfall. The new Vikings have been thriving on the cronyism and back-scratching culture of Reykjavik. Since the beginning of the 20th century banks and government have worked hand in glove. If a minister slipped into Opposition, he was more or less guaranteed a post as a bank director. The privatisation of the banks was supposed to end all that, but it merely continued by other means.

    Professor Thorvaldur Gylfason of Reykjavik University has been predicting disaster for years - on his desk sit wooden blind and deaf monkeys, representing central bank policymakers - and has been shunned for his efforts. “We have Thai-style croneyism that has failed the system,” he says. “The Government is not on top of the situation. It is in denial and has not been truthful about the system.”

    At the heart of this almost cabal-like approach to running the country is the sheer smallness of the capital city. Its two best schools, a classical grammar school and a business-orientated one, generate the elite. There is a fierce rivalry between them, but at the same time there is elaborate bonding going on. So the vice-chairman of the imperilled Landsbanki turns out to be an extremely good friend of the head of the central bank. The controls, insofar as they ever existed, are subverted by this shared intimacy: once the two men shared secrets about kissing girls, now they are running the economy.

    Talking to the young students in Kaffibarin, one might think that Iceland is preparing for a revolution. “They should be hounded down wherever they are,” says one firebrand, “brought back from the Cayman Islands or wherever they are hiding and brought to trial.”

    The business and political class are seen as traitors. Yet the anger is not simply a call for swift and sharp justice. Icelanders are returning to their sense of being islanders, rather than global players who can throw weight around in London and beyond.

    Islanders, when they return to their roots, know that they have to accept geographical limitations. On some Antarctic islands there is a breed of butterfly that cannot take off - it has learnt that it is safer not to fly than to risk the storm winds. One middle-aged Icelander, asked why he didn't just leave if he was so unhappy, looked at me with unblinking eyes: “And what if I went to Denmark or wherever and got lost? Who would look for me?”

    Secondly, Iceland remains a deeply Protestant country. Some of the people's anger is turned against themselves. “We went along for the ride, didn't we?” says the thirtysomething actress Sólveig Arnarsdóttir, who is dressed in a striking red seaman's coat to shield her from the Atlantic wind.

    “It's right to be worried now about the people who will lose their jobs or who are bending under their debts. I've got a house that was essentially owned by the banks; now it's owned by the Government, so maybe that's not a tragedy. But we have to think again about our obsession with money.”

    She and her friend Gudrún Gudmundsdóttir, one of Iceland's leading human rights activists, agree that the new Vikings, the financial bounty-hunters who have gained such clout, are part of a culture that is too testosterone-driven. “A third of our members of parliament are women,” says Arnarsdóttir, “but guess what - Parliament has had almost no say in what has been going on between these men in suits.” Gudmundsdóttir agrees: “We have to open up boards of companies to women.”
    Across the social spectrum, Icelanders agree: life has to change. You can't wish away global capitalism but you can change the way that elites manage that capital. The alternative is to see your country disappear down the plughole. “Running off to get a loan from Putin - why did they do that?” says an astonished Professor Gylfason. “Maybe they just thought that the Russians wouldn't tie the cash to changing the financial management of the country.”

    Whatever the reason, the kids in the still-just-cool clubs of Reykjavik know the metaphor that applies to their reckless rulers: they are dancing on the edge of the volcano.


    Icelandic facts

    Life expectancy in Iceland, at 81.3 years for women and 76.4 for men, is one of the highest in the world.

    The first people thought to have lived in Iceland were not the Vikings but Irish monks who settled there in the 8th century. They left when the Norsemen arrived, around AD870-930.

    Among the delicacies of Iceland is hakarl, the meat of a Greenland or basking shark which is cured and hung to dry for 4-5 months. Other specialities are boiled sheep's head and ram's testicles pickled in whey.
    More books are published per capita in Iceland than in any other country.
    Icelandic water is so clean, it is piped straight to the city's taps without treatment or chlorination.

    Ninety-nine per cent of Iceland's electricity comes from hydropower and geothermal energy. The country aims to be fully energy-independent by 2050.

    US astronauts chose Iceland to train for walking on the Moon before their expedition in 1969.

    Tipping in an Icelandic restaurant is considered an insult.

    As many as 80 per cent of Icelanders believe in the existence of elves. Roads have been rerouted and building plans abandoned to avoid disturbing rocks where elves are said to live.

    Every Icelander is known, and listed in the telephone directory, by his or her first name. For surnames, each child takes their father's name plus “son” or “daughter”. Iceland is the only country to uphold this Norse tradition.

    Sources: Icelandic Tourist Board, UN Development Index


    Icelandic exports

    Fish Iceland's fishing industry provides 70 per cent of its export economy, with cod the most commonly caught species. But fishing and fish processing now employs only 6 per cent of the workforce, with most people working in services.

    Aluminium The construction of huge aluminium smelters has caused controversy in a country that prides itself on its green credentials. Making aluminium requires large amounts of electricity, but geothermal and hydropower resources are used to power the plants. The metal is exported, to be turned into aircraft and drinks cans.

    Tourism The northern lights, clubbing, black sand beaches, hot tubs, and the best whale-watching in Europe. Iceland's growing tourist industry now contributes 12 per cent of its foreign currency earnings.

    Wool About 20 per cent of Iceland is suitable for raising livestock, and the warm wool of Icelandic sheep is famous. The country's biggest fashion hit has been the lopapeysa jumper. Characterised by a decorative circle around the neck, lopapeysas were traditionally worn by farmers and fisherman but have become trendy and a favourite souvenir for visitors.
    Björk The eccentric Reykjavik- born singer, known for dressing up as birds and her iconic music, has sold more than 15 million albums worldwide. She is considered such a national treasure that in 2000 the Government gave her free use of Ellidaey, an island off the northwest coast.

    timesonline.co.uk


    Professor Thorvaldur Gylfason of Reykjavik University has been predicting disaster for years - on his desk sit wooden blind and deaf monkeys, representing central bank policymakers - and has been shunned for his efforts. “We have Thai-style croneyism that has failed the system,” he says. “The Government is not on top of the situation. It is in denial and has not been truthful about the system.”

    Thanxs to New Mandala
    .

  2. #2
    nid aur yw popeth melyn
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    Kewl place - def like landing on the moon, but extremely expensive - luckily I was on the firm's expense account when I was there for a few months worth of work.

  3. #3
    Tiger Bay
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    If we had had the money Iceland would be my choice for retirement. So healthy.

    They have a great saying about those massive 4x4's so many drive there...

    "they make em, and we improve them".

    I hope they don't suffer too much because they are big-hearted friendly people, who know how to enjoy life.
    "The supreme irony of life is that hardly anyone gets out of it alive."

  4. #4
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    ^^ My old man used to love going over to the Iceland for meetings and inspections.

  5. #5
    nid aur yw popeth melyn
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    Nightlife in Rek is second to none, beautiful ladies running around which isn't half bad on the eyes either.

  6. #6
    lom
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    Good find and good summary Mid!

    The amazing thing is that even I, as a simple spectator, years ago could see that the imperiums they built were no more than bubbles with little substance.
    Makes one wonder how a bunch of British banks could continue to lend them money
    for so long time.

    That money was used as part payment, together with shares from their buying company, to take over and merge with retail chains, distribution chains, and fund commissioner companies all over Scandinavia and to some extent England.
    And many a split has been done in the holding companies when they were running out of cash..

    I'll go and look for a chart I saw some time ago, showing the big players in this game and the cross owning between them.
    I'll post it if it is still available online.
    May the bridges I burn light my way

  7. #7
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    Quote Originally Posted by britmaveric
    Nightlife in Rek is second to none, beautiful ladies running around which isn't half bad on the eyes either.
    I think he liked the heated toilet seats.

  8. #8
    lom
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    Here they are, the buykings.

    Isländsk snĺrskog - E24.se

  9. #9
    ding ding ding
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    When it finally goes bankrupt, Britain should buy the country on the cheap and then turn it into a big open prison and send all the undesirables from our mainland to live there. The great unwashed who arrive at Dover everyday, the workshy, and the downright socially inept.

  10. #10
    lom
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    Quote Originally Posted by Spin
    When it finally goes bankrupt, Britain should buy the country
    Queue up. (behind Russia)

  11. #11
    I am in Jail
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    a small country like that doesn't have any depth to make such financial commitment, there is a size effect that is just not there

  12. #12
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    Quote Originally Posted by Mid View Post
    Professor Thorvaldur Gylfason of Reykjavik University has been predicting disaster for years - on his desk sit wooden blind and deaf monkeys, representing central bank policymakers - and has been shunned for his efforts. “We have Thai-style croneyism that has failed the system,” he says. “The Government is not on top of the situation. It is in denial and has not been truthful about the system.”
    You know things here are getting pretty bad when expressions like "Thai-style cronyism" pops up in an article that have nothing to do with Thailand.

  13. #13
    disturbance in the Turnip baldrick's Avatar
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    ^ , a "hub" that is acknowledged wordwide - bwahahahaha

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    Quote Originally Posted by Mid
    As many as 80 per cent of Icelanders believe in the existence of elves.
    Idiots.

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    Tiger Bay
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    Trolls come from Scandinavia.

    You beieve in trolls don't you?

  16. #16
    pompeybloke
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    Quote Originally Posted by Spin View Post
    When it finally goes bankrupt, Britain should buy the country on the cheap and then turn it into a big open prison and send all the undesirables from our mainland to live there. The great unwashed who arrive at Dover everyday, the workshy, and the downright socially inept.

    Australia II then, but a bit colder

  17. #17
    bkkandrew
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    (I have also posted this here):

    http://teakdoor.com/us-domestic-issu...tml#post793208

    Another similarity with Thailand:

    IcelandReview - Online

    Many Icelanders took out EURO and USD denominated loans to avoid high domestic rates. Now their currency has collapsed they have no hope of meeting repayments.

  18. #18
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    ^Most of us don't go into the nutters forum

  19. #19
    Hansum Man! panama hat's Avatar
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    Quote Originally Posted by Spin
    Britain should buy the country on the cheap and then turn it into a big open prison and send all the undesirables from our mainland to live there, .................................... the downright socially inept.
    Didn't they come to live in Thailand???

  20. #20
    bkkandrew
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    ^You may have hit on something there. No more Gary Glitter-style deportations, send them straight to Iceland!

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    Iceland halts all share trading

    Iceland halts all share trading


    Landsbanki and Glitnir have already been nationalised

    Iceland has suspended trading on its stock exchange in an attempt to prevent further panic spreading throughout the country's financial markets.

    The OMX Nordic Exchange Iceland is closed for trading for two days and will reopen on Monday.

    The decision to suspend trading was taken due to unusual market conditions.

    It comes on the same day as Kaupthing, Iceland's largest bank, became the third bank to be taken over by the country's government in the past week.

    The country's Financial Supervisory Authority said it took over Kaupthing to safeguard its domestic banking system.

    All domestic deposits at the bank were fully guaranteed, it added.
    On Wednesday, the UK Treasury arranged for ING Direct to take over the Ł2.5bn of deposits of 160,000 UK customers of Kaupthing's online arm, Kaupthing Edge.

    Over the past years, Iceland has pursued a policy of inflation targeting, similar to the UK..In the case of Iceland it was disastrous.
    Jon Danielsson, Economist
    Financial Markets Group
    London School of Economics



    Analysis: What happened to Iceland?

    The Swedish central bank had already agreed to provide a loan to the bank's Swedish arm.

    Iceland's government has now seized control of all three of the nation's major banks. Landsbanki and Glitnir were taken over earlier this week.

    The country has struggled to cope with the global financial crisis.

    "The action taken... was a necessary first step in achieving the objectives of the Icelandic government and parliament to ensure the continued orderly operation of domestic banking and the safety of domestic deposits," Iceland's Financial Supervisory Authority said.


  22. #22
    Thailand Expat Texpat's Avatar
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    I thought the dwarfs migrated to Wales in the late 60s and started to mate.

    So how much do these Ankrighteous folk have invested in their "secret hideaways?"



    Damn it, they're some clever phucks.

  23. #23
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    Iceland Going Broke - Federalizing Banks




    and just to make sure you don't feel sorry for these people here is a video of their national pastime.

    Seal Clubbing: Pastime of the North



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    Ireland faces 34bn euro bill

    Ireland faces 34bn euro bill for Anglo Irish Bank bail-out - eight times the original estimate
    By DAILY MAIL REPORTER

    Ireland's debt-ridden economy was teetering on the brink of collapse today after it was revealed the cost of bailing out the toxic Anglo Irish Bank is set to hit 29.3 billion euro (Ł25.2 billion).
    The bailout, which exceeds the government's entire annual tax take, will bring Ireland's deficit to a massive 32 per cent of the value of its economy this year.
    Ireland's Central Bank said another 5 billion euro (Ł4.3billion) may also need to be poured into the nationalised rogue lender in a 'stressed scenario'.
    But Ireland's Finance Minister, Brian Lenihan, warned letting the bank fail could 'bring down' Ireland.
    He added that the costs of the rescue were 'fully manageable' under the Government's austerity measures.


    The Government said it was now likely that Allied Irish Bank would be majority state-owned.
    The Irish Nationwide Building Society, which is also under public control, needs another 2.7 billion euro (Ł2.3billion) - bringing to 5.4 billion euro (Ł4.6billion) the taxpayers' cash injected into the relatively small lender.
    The Government, European Commission and Irish Nationwide chiefs are in talks about its sale or takeover by another financial institution.
    Mr Lenihan claimed it was not an option to let Ireland's second biggest bank collapse: 'Any Anglo failure would bring down the sovereign. It is systemically important not because of any intrinsic merit in the bank.

    'But because of its size relative to the national balance sheet. No country could contemplate the failure of such an institution,' he said.
    The Finance Minister added that the overall level of State support to the banking system remained manageable and could be accommodated in the Government's fiscal plans.
    'We must continue the fiscal consolidation we have embarked upon.

    Taxpayers to the rescue: Brian Lenihan joins the ranks of politicians overseeing vast state aid packages for irresponsible banks
    'This is the only course to follow if we are to ensure the future economic well-being of our society.'
    But Mr Lenihan insisted this was a one- off spike and that the country remained fully committed to cutting the figure to just 3 per cent by 2014.
    A four-year budgetary plan is to be published in early November to set out a pathway towards this target.
    Mr Lenihan warned taxpayers that further 'significant' measures will be needed next year - over and above already announced cuts - to reduce the country's borrowing.
    The clean-up of Anglo Irish Bank has already sucked 22.9 billion euro out of the State coffers since it was nationalised early last year.
    The independent analysis by the Central Bank found another 6.4 billion euro will be needed, under normal circumstances.
    The extra five billion euro would be needed in a worst-case scenario where commercial property prices drop to 65 per cent of their peak values and do not recover until 2020.
    Senior bond holders will not be affected but subordinated debt holders - those who bought riskier debt in the bank - will have to share the pain, Mr Lenihan insisted.
    The Finance Minister said any attempt to make senior bond holders suffer for their investment in the rogue lender would hit Ireland's ability to borrow on international money markets.


    A veteran antibank protester dubbed the Anglo Avenger sealed off the Dail yesterday when he drove a cement mixer into the front gates of Leinster House.
    Joe Mcnamara, 41, who has previously used slogan-draped cherry pickers to protest outside anglo Irish's Dublin HQ, dumped the truck, emblazoned with the words 'Toxic bank anglo' at the gates after first clipping the iron barriers.
    No one was injured and the only damage was scuff marks on the blackpainted gates.
    Witnesses said the lorry driver stopped just short of ramming the Kildare Street gates of Leinster House.
    He then climbed on to the roof of his cab while Gardai smashed its windows with batons. Mr Mcnamara, originally from Achill Island, Co. Mayo, was detained for questioning.
    Mr Lenihan later told RTE Radio that the estimated final Anglo bill would bring closure and suggested the Government would not step in again.
    'Today's announcement brings to a close the public response to this crisis,' he said.
    'We have to bring closure to this matter and that is what we have done.
    'Of course these figures are horrendous but they can be managed over a 10-year period and they will be managed in that way.'
    Mr Lenihan also defended his policy not to let investors, known as senior bond holders who gamble on debt securities, take a hit for the bank going bust.
    'We're not telling the bank manager that we are going to default prior to asking for money,' he said.
    'We have not been doing that as a Government. and the extensive national debate on this subject which has taken place in the last two years is taking place in a unrealistic context.
    'This is a country which is highly dependent on international investment for jobs through the multinational sector, highly dependent on funding to keep the state going and highly dependent on international funding to keep the banks going.'
    He went on: 'The realistic policy of the Irish people is to rely on their own resilience which they have demonstrated in buckets and spades throughout this recession.
    'We have seen that resilience. We have seen a huge adjustment in wages, in prices, in values of property.
    'The people have accepted a great deal of this. The people realise that we operate in a competitive market place and the people realise if they rely on their strengths, if they make the necessary adjustments then Ireland can be a better place for our children in the future.
    'The alternative to that is to pursue this policy of delusion, of blaming others and of not taking responsibility for ourselves as a nation and as a people.'
    HOW THE ANGLO-IRISH BANKING CRISIS UNFOLDED

    TIMELINE OF A SCANDAL
    SEPTEMBER 30 2008: Irish Government announces 440billion euro banking system guarantee. Anglo’s share price rises 68 per cent. The last day of Anglo’s financial year sees 6billion euro to 7billion euro transferred from Irish Life & Permanent. The deposit appears in Anglo’s books as a customer deposit.
    OCTOBER 4: Anglo chairman Sean FitzPatrick (Picture above left with former finance director William McAteer) appears on radio to thank the Irish public for guarantee but refuses to apologise for his bank’s role in the near collapse.
    OCTOBER: PWC report on Anglo contains details of the 4billion euro scam, submitted to Finance Department.
    DECEMBER 18: Sean FitzPatrick resigns from Anglo after he is caught hiding personal loans of 87million euro from investors.
    DECEMBER 19: Chief executive of Anglo David Drumm steps down from the board.
    DECEMBER 21: Government announces a planned bailout of 1.5billion euro for Anglo.
    DECEMBER 30: Anglo shares bottom out at 12 cent each.
    JANUARY 7 2009: Anglo finance director William McAteer resigns.
    JANUARY 15: Fears over lack of deposits on Anglo’s books force Government to nationalise the bank. Brian Lenihan says FitzPatrick’s behaviour did ‘immense damage’. Mr Lenihan says he found out about the Irish Life & Permanent (IL&P) loans around this time.
    JANUARY 16: Angry shareholders call for sacking of the board.
    JANUARY 19: Five non-executive directors step down.
    JANUARY 20: Dáil is recalled early so the Government can push through public ownership of Anglo. Mr Lenihan does not tell Dáil about the secret deposits by IL&P.
    JANUARY 30: Pat Neary, the Financial Regulator, retires early after admitting his office knew about FitzPatrick’s loans.
    FEBRUARY 10: IL&P’s transfer of between E4bn to 6bn euro is discovered by investigators.
    FEBRUARY 11: Finance Minster Brian Lenihan says there is no evidence of similar transfers in the rest of the banking sector, while Taoiseach Brian Cowen denies any prior knowledge of money shifting and collusion inthe banking sector.
    Once an aggressive loan machine betting on property deals, Anglo-Irish Bank's mistakes dramatically infected other finance houses and the wider economy.
    Famed for quick decisions for developers, the lack of red tape made it the flag-bearer for an economy driven by land sales, building and house buying.
    But reckless lending turned a prime mover on the stock markets into the zombie bank of a crippled economy and left the citizens of the Republic to clear the debts.
    But the property deals were just the tip of the iceberg. In 2009, it emerged that Anglo Irish Bank board members and executives had used loans from the bank to invest heavily in speculative movie ventures.
    Those who invested in the film industry - a notoriously difficult and high-risk area to fund successfully - included the bank's finance director and chief risk officer, William McAteer.
    The 17-year company veteran, Mr McAteer was among the first batch of directors to resign in December after it emerged that former Anglo Irish chairman Sean FitzPatrick had secretly borrowed as much as 129million euro.
    Anglo shareholders were also told in 2009 that some of the 180million euro in loans issued to board members was specifically used for financing film deals.
    In January 2009, fears over lack of deposits on Anglo’s books forced the Government to nationalise the bank.
    Finance Minister Brian Lenihan said FitzPatrick’s behaviour did ‘immense damage’. Mr Lenihan said he found out about the Irish Life & Permanent (IL&P) loans around this time.
    Later that month, Ireland's financial watchdog retired early after admitting his office knew about FitzPatrick’s loans.
    Only in February were new rules introduced to force banks and other lenders to give details of the maximum amount of loans outstanding to directors.
    Mr FitzPatrick and Mr McAteer were arrested earlier this year. Files on both their cases have been sent to the Director of Public Prosecutions but zero charges have been made to date.
    At the time of arrest earlier this year, Finance Minister Brian Lenihan said: ‘Clearly, justice has to take its course and I have always pointed out that the Garda investigation... and the investigation conducted by the Office of the Director of Corporate Enforcement is wide-ranging and comprehensive'.


    Read more: Ireland faces 34bn euro bill for Anglo Irish Bank bail-out | Mail Online

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