For a country of only 320,000 people (175th in the world population rankings and about the same size as Leicester in the UK), Iceland has consistently punched well above its weight with its impact on world culture.
For fans of avant garde music, blonde footballers, fish-based naval stand-offs, ominous quiz music, and frozen food, the world would be a very different place without the volcanic Atlantic island.
Depending on your view of frozen food, football, or Björk, the swan-wearing songstress, the absence of Iceland would presumably be a bad thing; for the British and Dutch finance ministries though, Iceland and its 320,000 citizens are an unwanted £3.3bn headache.
After the Icelandic banking industry collapsed in 2008, the British and Dutch governments found themselves refunding their citizens who had just lost their savings. Since then, the British and the Dutch have been trying to get the money back (Iceland has already promised to repay most of the money, the sticking point is the terms and conditions).
The Icelanders have understandably taken a dim view of the speed at which they are being asked to repay the £3.3bn - given that it was Icelandic-based banks that lost the money rather than the Icelanders themselves - and 93% of them rejected the current repayment plan in a referendum over the weekend. As The Economist notes though, this show of people power could prove costly as a £3bn IMF loan is contingent on the country repaying its debts.
The question in Iceland is a repeat of the problem faced by the UK two years ago: whether or not it's right for taxpayers to bailout failing/failed private banks. The answer to this question is undoubtedly ‘yes' - the economic crisis would have been worse without bailouts - but really the question is one that shouldn't have been asked in the first place. The financial sector messed up, big time.
In two papers, The Future of Financial Regulation and its update, ACCA's policy team has looked at ways to prevent taxpayers being once more put in a position where they have no choice but to clean up the messes of a risk-ignorant financial sector. (The Centre for Analysis of Risk and Regulation has an excellent edition of its e-zine on regulation and the financial crisis too. Read it here).
The key points from the papers include: the need for a review of the purpose and structure of regulation; the need to consider separating wholesale and retail banking; the need for an introduction of an ethics-based corporate culture to financial institutions; the need for a review of corporate governance (particularly the role of non-executive directors); improved accountability, audit, and remuneration structures; and the need for international regulatory authorities to agree on, and enforce, a definition of optimal capital levels for the major retail banks.
So far, the British taxpayers have had to stump up for losses made by banks in both the UK and Iceland. They shouldn't have to bear the same burden again.
For fans of avant garde music, blonde footballers, fish-based naval stand-offs, ominous quiz music, and frozen food, the world would be a very different place without the volcanic Atlantic island.
Depending on your view of frozen food, football, or Björk, the swan-wearing songstress, the absence of Iceland would presumably be a bad thing; for the British and Dutch finance ministries though, Iceland and its 320,000 citizens are an unwanted £3.3bn headache.
After the Icelandic banking industry collapsed in 2008, the British and Dutch governments found themselves refunding their citizens who had just lost their savings. Since then, the British and the Dutch have been trying to get the money back (Iceland has already promised to repay most of the money, the sticking point is the terms and conditions).
The Icelanders have understandably taken a dim view of the speed at which they are being asked to repay the £3.3bn - given that it was Icelandic-based banks that lost the money rather than the Icelanders themselves - and 93% of them rejected the current repayment plan in a referendum over the weekend. As The Economist notes though, this show of people power could prove costly as a £3bn IMF loan is contingent on the country repaying its debts.
The question in Iceland is a repeat of the problem faced by the UK two years ago: whether or not it's right for taxpayers to bailout failing/failed private banks. The answer to this question is undoubtedly ‘yes' - the economic crisis would have been worse without bailouts - but really the question is one that shouldn't have been asked in the first place. The financial sector messed up, big time.
In two papers, The Future of Financial Regulation and its update, ACCA's policy team has looked at ways to prevent taxpayers being once more put in a position where they have no choice but to clean up the messes of a risk-ignorant financial sector. (The Centre for Analysis of Risk and Regulation has an excellent edition of its e-zine on regulation and the financial crisis too. Read it here).
The key points from the papers include: the need for a review of the purpose and structure of regulation; the need to consider separating wholesale and retail banking; the need for an introduction of an ethics-based corporate culture to financial institutions; the need for a review of corporate governance (particularly the role of non-executive directors); improved accountability, audit, and remuneration structures; and the need for international regulatory authorities to agree on, and enforce, a definition of optimal capital levels for the major retail banks.
So far, the British taxpayers have had to stump up for losses made by banks in both the UK and Iceland. They shouldn't have to bear the same burden again.
Comments