The hard core Kaupthinking – and Ice-banking
Here is a video, with a voice-over in English based on Icelandic tv reporting on Kaupthing, explaining the bank’s prop trading, how it kept the share price high and allegedly manipulated the market. “Kaupthinking, thinking beyond” was the slogan the bank used in its advertising.
To my mind, the prime example of Kauthinking is found in an email sent by Kaupthing Luxembourg manager Magnus Gudmundsson, now indicted by the Office of the Special Prosecutor, and Armann Thorvaldsson CEO of Kaupthing Singer & Friedlander. In the mail they called themselves “association of loyal CEOs.” Describing the set-up of a certain bonus scheme, they write: “The bank wouldn’t make any margin calls on us and would shoulder any theoretical losses, in case they occurred.” (In Icelandic: ,,Bankinn hefði engin margincall á okkur og myndi taka á sig fræðilegt tap ef að yrði.”
This is the Kaupthinking behind all loans to favoured clients, be they Icelandic or foreign. The question is: What sort of banking was this? In the interest of Kaupthing’s 33.000 shareholders? – To be fair, this kind of lending wasn’t unique to Kaupthing. It was common to the Icelandic financial system before the collapse of the banks (and hopefully no longer). Creating a slogan, this was Ice-banking.
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Many thanks for your reporting. It helps to expose the robbers. Let’s hope that Iceland will pursue the criminals for the sake of the citizens and nation’s conscience
david
25 Feb 12 at 2:53 pm
Thanks again Sigrun for this link. Incredible.
The glossy brochure distributed to the unsuspecting depositors of The Derbyshire (Isle of Man) at the time of its takeover by Kaupthing just 9 months before the collapse proudly proclaimed “Thinking beyond the short term gain, thinking beyond the status quo”. Lead like lambs to the slaughter, we very soon discovered that what lay beyond short term gain was in fact long term loss and that the status quo was soon to be gone for ever. This was Kaupthinking in action.
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