Government Takes Banks to Task - The Reykjavik Grapevine

Government Takes Banks to Task

Published October 6, 2010

Following up on criticism the prime minister made in her address to parliament Monday evening, bank representatives have been called to answer to the Committee for Social Affairs and Insurance. In related news, very few families are using special debt assistance programs offered by the banks.
As reported, Prime Minister Jóhanna Sigurðardóttir said in part Monday evening that the new banks have not done enough to help individuals and companies adjust to debt, and pay down what they owe in an easier fashion. She said that the banks have “dragged their feet” on this issue. Birna Einarsdóttir, the president of Íslandsbanki, dismissed the criticism, telling Vísir that the government is “oversimplifying” matters.
Iceland’s major banks, although nationalized in the wake of the economic collapse in 2008, have been mostly privatized since 2009. Íslandsbanki, for example, is 95% private.
This, of course, does not preclude the government from being able to take action. Sigríður Ingibjörg Ingadóttir, chairman of the committee, told RÚV that the banks have not done enough to help ease loan payments on families and small companies. She said that if banks did not do more, the government would be “forced to take more serious measures”.
In related news, Eyjan reports that only 128 individuals have taken advantage of special loan payment programs being offered by private banks for people deeply in debt. However, it is unclear if this is because the demand for such a program is so low, or so few people know about them, or the banks are simply too slow in processing requests.


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