Sigrún Davíðsdóttir's Icelog

‘No’, is my short answer to the question above echoing all around Iceland. I am confident that the report of the Investigative Commission, set up at the behest of Althingi, the Icelandic parliament, will answer many of the questions that have been in the air since the collapse of the three main Icelandic banks in October 2008. And I’m sure it will also answer questions that no one has thought of asking. We just have to keep in mind that the Commission’s remit is to clarify the collapse – i.a. why the banks collapse, how they operated and the role of the regulators, the politicians and the media – it’s not a criminal investigation.

The report has taken  much longer than foreseen. It was supposed to come out on November 1, less than a year after it set to work. This was undoubtedly far too optimistic to begin with but not until well into October did the Commission announce up to three months’ delay. Late January the publication was again postponed, no date give – until finally that Monday April 12 has now been set as the date of publication.

The delay has given rise to all sorts of conspiracy theory. One of the more persisting ones is that the report was finished already in January but has since been purged of ‘compromising’ material. I don’t for a second believe that this has been the case. Everyone who has ever written something that involves a large amount of information from various sources knows that editing is a time-consuming process. In addition, extensive parts though not the whole report have been translated into English.

When the text was more or less finished leading politicians and high-ranking civil servants, in all twelve persons, were allowed to read and control what was written about them and to counter or clarify the report’s account, with documentation if they wished. Out of this came allegedly 500 pages of material that the Commission then had to review. Except for eventual errors it’s unlikely that the Commission has changed its text much during this review. If those twelve wish their views to be known their riposte is published as an appendix.

So far, the only known fact is that the report will be published on Monday April 12 but the programme for that day is still unknown. Monday April 12 will be the first day that Althingi gathers after the Easter recess, with a meeting scheduled at 3pm. It’s always been understood that Althingi and the general public will receive the report at the same time, i.e. that the web version will be released as soon as the Althingi is presented with the printed version (which will be sold in books shops for ISK6.000, £30, the price of a hardback though the report, running to more than 2000 pages, is a tad longer than a normal hardback).

However, since the Althingi’s Presidium (consisting of MPs from all the parties in Althingi) appointed the Commission it seems logical that the Presidium will first be presented with the report – then they can answer the questions that undoubtedly will arise once the rest of us can read the report. My guess – and it’s only a guess – is that the Commission will meet with the Presidium early in the day, followed by a press conference as the text will be released on the internet.

In a comment on Icelog, Tony Shearer, CEO of Singer & Friedlander at the time Kaupthing bought it, points out that the Icelandic report emphasises ‘the fact that the UK Government is not doing so, and has steadfastly refused to do so. The reasons are simply that the current UK Government and Prime Minister have no desire for one to be published as it would inevitably place the main causes of the failures of the British Banks at the doors of Gordon Brown, Ed Balls and Tony Blair, the three politicians who, at that time, were responsible for the UK economy. Their failures lead to the collapse of the UK banks, but also were heavily instrumental in the collapse of the Icelandic banks of Kaupthing and Landsbanki. Hopefully the Icelandic report will be direct and clear as to where the blames truly lies. If so, it will be a tribute to Icelanders. It will also show how the Icelandic political system is strong enough to force such a report, and the UK one so weak that people in power are not held accountable.’

Telling the truth is a sign of strength. Of course, banks such as Royal Bank of Scotland, Lloyds and the three Irish banks, Anglo Irish, Allied Irish and Bank of Ireland where the state now is a major shareholder, should be scrutinised. It’s not enough just to bring Anglo Irish’s chairman to court. The Irish need to know what happened – and the same counts for the UK: the British need to know why the British government was forced to become a bank owner.

But there is more in store regarding the banks. Glitnir’s resolution committee has hired Kroll to scrutinise Glitnir’s operations. When finished, this report will be published, possibly later in spring or early summer. I’ve already heard that the report is a riveting read. The resolution committees of both Kaupthing and Landsbanki have had forensic teams doing similar work. Hopefully, their reports will also be published.

As to possible criminal acts within the banks that’s for the Special prosecutor to work on. Another story of delays – the first charges were expected at the beginning of this year – but now it seems as if they might appear before the end of April. Again, it takes time to chase information through the tangled web of companies stretching from Iceland, Cyprus and Panama, to name but a few off shore jurisdictions used by Icelandic businessmen and their bankers.

The Commission’s report will hopefully tell the story of the Icelandic financial system in a clear and concise way. But it might also give us a different story from the one mostly expected. One thing that’s been repeated over and over again for the last months is that the Icelandic FSA, FME, was a cheerleader for the banks instead of keeping them on a short leash. Clearly the FME was no better than regulators in so many other countries but recently, I spoke to someone who has read the minutes of the board at one of the banks: the minutes show clearly that the FME did indeed try to enforce rules and regulations on the bank – but the bank spent a lot of time and man power to figure out how best to evade the rule.

The fact that the UK FSE, as late as February 2008, allowed Kaupthing to set up a high- interest internet account, not to mention Landsbanki and the Icesave, indicates that the FSE also has some things to clarify – but so far, only silence. No matter how dismal the story in the April 12 report will be the relief is that knowing is better than not knowing.

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