From Iceland — Former Finance Minister Speaks Candidly About Bank Crash

Former Finance Minister Speaks Candidly About Bank Crash

Published November 24, 2010

Former Minister of Finance Árni Mathiesen has spoken candidly about the collapse of Iceland’s banks, and his communications with British authorities, in a newly released book.
Mathiesen, despite having no education in economics whatsoever (but does have an M.Sc. in veterinary sciences), was made Minister of Finance in 2005, and remained such until the Independence Party, to which he belongs, was driven from power in the wake of popular protests. More recently, he was named by a special committee as an individual who should face charges of negligence and mismanagement for his part in the bank collapse. However, a parliamentary vote on the matter taken last September had him narrowly miss going to court, 32 votes to 31.
In an effort to revamp his image, Mathiesen has written a tell-all book, alongside Þórhallur Jósepsson, entitled “Árni Matt – From Bank Collapse to Revolution”. Some of the tidbits from the book that Fréttablaðið reports include:
Then-Central Bank manager Davíð Oddsson met with him on 4 October 2008, where Oddsson read to him from a letter from British Central Bank manager Mervyn King. Oddsson interpreted King’s letter to mean that Icelanders were not obliged to pay Icesave.
“But King was just a bank manager, and was not in a position to say that,” the book reads in part. “It takes a minister to decide that, so I saw right away that the contrary was likely; that we would need to make a deal.”
As has become common knowledge, this entailed a now infamous phone conversation between Mathiesen and then-Chancellor of the Exchequer Alistair Darling. Almost immediately after this conversation took place, the British applied the Anti-terrorism, Crime and Security Act 2001 to freeze Landsbanki’s assets in the UK.
“The attack was so fast and surprising that people asked themselves what was behind this, whether the British had gone mad,” Mathiesen wrote in part. He contends that Icelandic authorities had no warning, and no reason to believe that this law would be used against them. He says that he left his conversation with Darling with the understanding that he was worried, but wanted to find a solution to the Icesave matter.

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