Sigrún Davíðsdóttir's Icelog

Today, ESA has approved of Icelandic amendments to the rescue plans for small savings banks. Further, ESA has given temporary approval of plans to recapitalise Byr, another savings bank.

The Icelandic saving banks have been part of the Icelandic financial system for over hundred years. These small saving banks are regional banks, intertwined with the local economy. However, during the boom times, they played some seriously unwise games with the Icelandic tycoons and the banks, helping the banks to get money out of the Central Bank via repo deals. Their demise has given insight into ill advised investments and unsavoury connections to local fiefdoms. Althingi has been preparing a bill to investigate the saving banks but no one seems to be in a hurry to get the bill through and start digging.

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