Parliament Against Another Bank Bail-Out - The Reykjavik Grapevine

Parliament Against Another Bank Bail-Out

Published August 3, 2010

The majority of parliament seems to be against the idea of re-financing lenders, most saying that the banks have been given enough money already.
Bloomberg reports that Iceland’s banks are seeking help after a June court ruling found them liable “for currency losses on as much as $28 billion in loans,” specifically, to giving out loans tied to foreign currency – a practice that turned out to be illegal. However, most members of parliament – many of them in the opposition parties, but as well as some Leftist-Greens – appear to be against the idea of bailing the banks out a second time.
Some of the reluctance may stem from a statement Moody’s made last week, when they threatened to cut Iceland’s credit rating to junk if more cash was handed to the country’s banks. Nonetheless, many members of parliament remain firmly against refinancing.
“Enough money has been pumped into the banks; the financial system is much too large,” Leftist-Green MP Guðfríður Lilja Grétarsdóttir told Bloomberg.
Meanwhile, Prime Minister Jóhanna Sigurðardóttir said in an e-mail that, “The government will on the one hand look toward ensuring stability and economic resurrection, and on the other hand to achieving fair and necessary solutions on behalf of individuals and families.”

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