From Iceland — Former Finance Minister Says He Bears No Responsibility for Bank Collapse

Former Finance Minister Says He Bears No Responsibility for Bank Collapse

Published December 7, 2010

Former Minister of Finance Árni Mathiesen claims he bears no responsibility for the bank collapse of 2008, even though he served in his position from 2005 through the crash.
Árni was last fall 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. Mathiesen has recently published a book describing his time as finance minister, from the bank collapse until he, and others in the Independence Party, were driven from power by popular protests.
So how is it that the Minister of Finance bears no blame for the collapse of Iceland’s banks? In short: it’s not in the job description.
Speaking on the news discussion show Kastljósið, Árni said, “According to the division of duties outlined by the prime minister’s office, the Ministry of Finance does not have the task of supervising the banks, following internal operations, or taking special actions towards the banks.”
While it is true that the ministry’s mission statement does not specifically talk about supervising banks, what Árni fails to mention is that the primary goal of the ministry is “a stable economy and a good standard of living”. Furthermore, the Ministry of Finance is very closely connected to the Central Bank, working with them in shaping economic policy in Iceland. The Central Bank, in turn, works with the Financial Supervisory Authority.
Maintaining a stable economy is the primary focus of the Ministry of Finance, in other words, and to this end the ministry does have the power to get all necessary information about the country’s banks from the Central Bank, as well as to advise the Central Bank to have the Financial Supervisory Authority investigate anything the ministry may find suspicious about banking activities.
“I bear no responsibility for supervising the banks, or to respond to their situation,” Árni said in part, saying that Icelandic authorities were deceived by the country’s bank managers. When asked why it was that so few politicians seemed to know what was happening within the banks, he said that he “was informed about what was going on,” and to that extent bears “political responsibility.”

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