bluemonday Posted October 24, 2008 Share Posted October 24, 2008 Just asked the IMF for a two billion dollar loan. http://news.bbc.co.uk/2/hi/business/7689633.stm Link to comment Share on other sites More sharing options...
Skeddan Posted October 24, 2008 Share Posted October 24, 2008 But IMF won't do this until Iceland has settled the dispute with the UK. This means that a settlement is more likely, and that Iceland probably won't therefore take legal action against the UK. (Which rather leaves Tony Brown out on a limb when he went out yesterday and said that he holds the British Government responsible). On the positive side, the IMF position and Iceland's eagerness to secure this could work to IoM's favour. IoM might remind the IMF that Iceland must settle its responsibilities/guarantees to IoM as well before IMF grant this $2bn loan, and could be a flea in the ointment. Link to comment Share on other sites More sharing options...
Sebrof Posted October 24, 2008 Share Posted October 24, 2008 But IMF won't do this until Iceland has settled the dispute with the UK. Not saying you are wrong, but where did you glean this information? S Link to comment Share on other sites More sharing options...
Skeddan Posted October 24, 2008 Share Posted October 24, 2008 But IMF won't do this until Iceland has settled the dispute with the UK. Not saying you are wrong, but where did you glean this information? You can find it here: http://business.timesonline.co.uk/tol/busi...icle5004002.ece Iceland now seem to be trying to suggest IMF might approve without settlement with UK - but I haven't seen anything from IMF to indicate that may be so. Instead a proposal has been made, and will be presented for approval - which I'd think will almost certainly be contingent on at least basic principles of an agreement being settled between UK and Iceland. Link to comment Share on other sites More sharing options...
Tempus Fugit Posted October 25, 2008 Share Posted October 25, 2008 I see a comment in that article The UK, IMF, and Iceland better represent those poor souls that lost everything in the Isle of Man branch of Kaupthing. Last I heard, a full half billion of their savings has been frozen by the UK government. My dad, a UK citizen tax payer just lost 50 years of work/savings and is now destitute. Link to comment Share on other sites More sharing options...
Sebrof Posted October 25, 2008 Share Posted October 25, 2008 But IMF won't do this until Iceland has settled the dispute with the UK. Not saying you are wrong, but where did you glean this information? You can find it here: http://business.timesonline.co.uk/tol/busi...icle5004002.ece Iceland now seem to be trying to suggest IMF might approve without settlement with UK - but I haven't seen anything from IMF to indicate that may be so. Instead a proposal has been made, and will be presented for approval - which I'd think will almost certainly be contingent on at least basic principles of an agreement being settled between UK and Iceland. I think there is another possible way to read this, which is that the IMF simply want the issue resolved one way or the other so that they know how much money Iceland actually needs. S Link to comment Share on other sites More sharing options...
P.K. Posted October 25, 2008 Share Posted October 25, 2008 You heard it here first folks: So Iceland owes between £45 - £50 bn or about 5 times it's GDP. So about all they can offer in compo is some cod quotas, which is the problem with offshores. Let's hope the IMF like fish on a Friday... Link to comment Share on other sites More sharing options...
Skeddan Posted October 25, 2008 Share Posted October 25, 2008 I think there is another possible way to read this, which is that the IMF simply want the issue resolved one way or the other so that they know how much money Iceland actually needs. It looks like the essential issue may now be resolved - Iceland committing to meet its legal obligations. (Beforehand it looked like it would have to renegotiate these and come to an arrangement or settlement instead). A sovereign state should of course have 'international responsibility' and keep its obligations and agreements. From what I understand it looked like Iceland might renege as a matter of public necessity and impossibility of meeting these obligations. Iceland would effectively become a 'failed state' in terms of its international obligations, which is why the UK took action to protect it's own economic interests. No one likes the idea of a nation states being able to default on their international obligations and going down the failed state path. That's part of the raison d'etre of the IMF, and its purpose is to allow a state to remain solvent and continue to be bound to its obligations rather than the unacceptable option of collapsing and having these wound up in a can of worms. (If that became allowable 'state practice' the whole house of cards could come tumbling down - remember Mexico and third world debt). It's unfortunate that the UK took this kind of pre-emptive action in response to Iceland's difficulties, and ideally would have been better if IMF could have been brought in at that point with emergency guarantees that would have made this seizure of assets unnecessary. Had Iceland and UK done that, it might have saved a lot of the additional damage created by fear, uncertainty, mistrust, miscommunication and loss of confidence. It's humiliating for Iceland to have to commit to honouring its legal obligations, but that done I'd think things can now progress towards keeping the country running. It might now all move ahead quite quickly over the next week or so. Yes Iceland will probably be an IMF slave for decades, but the rationale isn't that of a commercial loan - it's about not letting the 'international order' come unstuck - that's the issue the IMF want to resolve, and that's why IMF loans are contingent on 'international responsibility'. Link to comment Share on other sites More sharing options...
P.K. Posted October 25, 2008 Share Posted October 25, 2008 Yes Iceland will probably be an IMF slave for decades, but the rationale isn't that of a commercial loan - it's about not letting the 'international order' come unstuck - that's the issue the IMF want to resolve, and that's why IMF loans are contingent on 'international responsibility'. I recall Denis Healey obtained an IMF loan for the UK. But then the UK had a broad-based GDP. Iceland is about the equivalent to Brighton. I would be interested in how Iceland's GDP breaks down as I don't see it paying back the IMF loan from a thriving financial sector. Link to comment Share on other sites More sharing options...
hboy Posted October 25, 2008 Share Posted October 25, 2008 That old slag Kerry Katona has really screwed up the world economy. Link to comment Share on other sites More sharing options...
jimbms Posted October 25, 2008 Share Posted October 25, 2008 Japanese Banking Crisis Following the problems in the sub-prime lending market in America and the collapse of Icelandic Banks, uncertainty has now hit Japan. In the last 7 days Origami Bank has folded, Sumo Bank has gone belly up and Bonsai Bank announced plans to cut some of its branches. Yesterday, it was announced that Karaoke Bank is up for sale and will likely go for a song, while today shares in Kamikaze Bank were suspended after they nose-dived. While Samurai Bank fell on its sword, Ninja Bank is reported to have taken a hit, but they remain in the black. Furthermore, 500 staff at Karate Bank got the chop and analysts report that there is something fishy going on at Sushi Bank where it is feared that staff may get a raw deal. Link to comment Share on other sites More sharing options...
Sebrof Posted October 25, 2008 Share Posted October 25, 2008 I think there is another possible way to read this, which is that the IMF simply want the issue resolved one way or the other so that they know how much money Iceland actually needs. It looks like the essential issue may now be resolved - Iceland committing to meet its legal obligations. (Beforehand it looked like it would have to renegotiate these and come to an arrangement or settlement instead). A sovereign state should of course have 'international responsibility' and keep its obligations and agreements. From what I understand it looked like Iceland might renege as a matter of public necessity and impossibility of meeting these obligations. Iceland would effectively become a 'failed state' in terms of its international obligations, which is why the UK took action to protect it's own economic interests. No one likes the idea of a nation states being able to default on their international obligations and going down the failed state path. That's part of the raison d'etre of the IMF, and its purpose is to allow a state to remain solvent and continue to be bound to its obligations rather than the unacceptable option of collapsing and having these wound up in a can of worms. (If that became allowable 'state practice' the whole house of cards could come tumbling down - remember Mexico and third world debt). It's unfortunate that the UK took this kind of pre-emptive action in response to Iceland's difficulties, and ideally would have been better if IMF could have been brought in at that point with emergency guarantees that would have made this seizure of assets unnecessary. Had Iceland and UK done that, it might have saved a lot of the additional damage created by fear, uncertainty, mistrust, miscommunication and loss of confidence. It's humiliating for Iceland to have to commit to honouring its legal obligations, but that done I'd think things can now progress towards keeping the country running. It might now all move ahead quite quickly over the next week or so. Yes Iceland will probably be an IMF slave for decades, but the rationale isn't that of a commercial loan - it's about not letting the 'international order' come unstuck - that's the issue the IMF want to resolve, and that's why IMF loans are contingent on 'international responsibility'. Skeddan, my understanding is that the debt is not sovereign debt - it was racked up by commercial banks. Even if Iceland has nationalised the banks, the debts are still company debts, not national ones. And if the figures being mentioned are anywhere near right, there is no hope of Iceland repaying the debt. S Link to comment Share on other sites More sharing options...
Lonan3 Posted November 20, 2008 Share Posted November 20, 2008 BBC News The International Monetary Fund (IMF) has approved a $2.1bn (£1.4bn) loan for Iceland, after the country's banking system collapsed in October. Following the IMF announcement, Finland, Sweden, Norway and Denmark said they would lend Iceland an additional $2.5bn. Iceland has said the IMF funds will be used to stabilise its currency, reintroduce a flexible interest rate regime and to overhaul its financial regulation system, especially insolvency laws. No mention of repaying investors. Link to comment Share on other sites More sharing options...
bluemonday Posted November 20, 2008 Author Share Posted November 20, 2008 Hurrah! King David is on the case http://www.iomtoday.co.im/news/39King-Davi...over.4711242.jp Link to comment Share on other sites More sharing options...
Skeddan Posted November 20, 2008 Share Posted November 20, 2008 Hurrah!King David is on the case http://www.iomtoday.co.im/news/39King-Davi...over.4711242.jp "Now he's gone into battle on the Island's behalf over the Kaupthing bank crisis" Erm - what is he actually going to do? "That standard would be total national independence from the UK. Anything short of that and there are no standards... 'Under such tyranny why would anyone feel safe putting their money in an IoM offshore bank? Now, that would be absurd " It seems he is saying that without 'total national independence' it would be absurd for anyone to have confidence having investments in IoM. I think we know 'King Dave' is a bit of a dick, but why are IoM Newspapers giving this coverage? IMO it's not responsible journalism. Link to comment Share on other sites More sharing options...
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