In an interview that Icelandic president Ólafur Ragnar Grímsson gave to
the Financial Times Deutschland set off a media frenzy in Germany when
the president was quoted as saying that foreign depositors would
receive no compensation for their losses. The president contends he was
misquoted.
Newspapers and magazines such as Die Welt, Bild Zeitung and Die Zeit
all featured headlines paraphrasing the Icelandic president as saying
that German depositors who’d invested in Kaupthing wouldn’t be
receiving compensation, because Icelanders themselves have lost so much.
The president’s office responded by issuing a statement, saying there’d
been a misunderstanding. The statement issued by the president is as
follows:
“Following a misleading report of an interview with the President of Iceland Olafur Ragnar Grimsson in the Financial Times Deutschland the President wants to emphasize that in his discussion with the reporter, he pointed out that there was a clear and strong will to honour the commitments of Icelandic financial institutions in other countries as had been demonstrated a few days earlier when it was declared that the depositors of Kaupthing in Austria, Norway and Finland were to be fully compensated.
It was, however, important that people in other countries, including our friends in Germany, would appreciate that the people of Iceland, ordinary citizens, families, pensioners and others had suffered great financial losses. It was a misleading view, held by some in other countries, that the citizens of Iceland would be compensated fully while people in other countries would suffer losses. The President said that it would take time to work through these difficulties but that the results in Austria, Norway and Finland clearly demonstrated, that the Icelandic authorities and institutions were trying to do their best, in accordance with earlier statements made by the authorities and the banks.
In addition, the President emphasized in the interview that the existing European banking regulatory framework allows banks to operate across the European market, whereas regulatory bodies are restricted by national boundaries. In a much needed reform of the European financial system it would be important to correct this imperfection.