There has been a lively discussion on Icelog regarding Landsbanki, Luxembourg. For all of you interested in that matter, I strongly advise you to read it. I will take a better look at it myself in the coming days but here are a few issues touched upon:
Regarding Landsbanki operations:
The valuation that Landsbanki made of the properties – and then sudden drop in value just before the bank failed, is commented on by Sharon, a real estate agent in this area in France where many of the houses are.
Money was taken from accounts to buy Landsbanki bonds, even though the clients had it in writing that no investments were to be made without their approval.
Information of risk sent to clients after the loan was issued.
Serious lack of information and documentation, in addition to the questionable valuation, when the bank claimed the “security ratio” (the ratio between the loan and the collateral) had fallen and the clients was obliged to pay in order to address the shortfall.
Promises were made to make money available to clients but it seems that no money was forthcoming from Landsbanki – at least for some clients – already from July.
After the administrator took over:
In spite of investigations by the failed banks’ Icelandic resolution committees, ia Landsbanki’s ResCom, into the banks, the administrator in Luxembourg seems not to have undertaken any investigation, or at least that hasn’t been made known to clients.
Information from administrator to former clients on what they supposedly owe the bank does in many cases differ greatly from what the clients themselves see as possible but they don’t seem to be getting any explanation as to why there is this great difference.
These comments show that both regarding Landsbanki’s own operations and then the operation of the administrator there are serious issues to be addressed. There seems good reasons to question some legal aspects of the loans themselves – and then the administrator seems to have done a questionable job of dealing with the equity release loans. All this has been to a great distress for the clients involved.
For further information, here is an earlier Icelog on the nature of the equity release loans and Luxembourg.
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