Bondholders in Landsbanki don’t need to hold their breath much longer. In an interview with minister of finance Steingrimur J Sigfusson on Bloomberg Sigfusson states clearly that there won’t be much left after the priority claims have been paid out.
“The comments end hopes creditors, including BNP Paribas SA and Nordea Bank AB, may have had of recouping their share of $27.4 billion in debt owed them since Landsbanki’s collapse in October 2008.” All in all the collapse of the Icelandic banks left a debt of $85bn.
The question is what these two banks and banks such as Deutsche Bank had in mind when they showered the little island in the North Atlantic with amounts equalling decades of its GDP. Deutsche’s cooperation with Kaupthing in influencing its CDS is now being investigated by the Serious Fraud Office, as part of its investigation into Kaupthing. Deutsche has also been scrutinising its cooperation with Landsbanki, I’m told. Deutsche’s business with Thor Bjorgolfsson, one of Landsbanki’s major shareholders and the largest shareholder of Straumur, goes a long way back, back to his beginnings in Russia.
The Icelandic banks then lent the money on to their clients, often against no collaterals. Any read faces out there in international banks that were so lavish in their dealings with the Icelandic banks?
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