Iceland

Iceland was within its rights not to repay billions of euro to the United Kingdom and Dutch governments, who were forced to compensate depositors after an Icelandic bank collapsed at the height of the global financial crisis, a court has ruled, the Irish Times reported. The decision was taken by the court of the European Free Trade Association (Efta), which ruled that Iceland had not broken depositor protection laws by refusing to compensate people who had invested in Landsbanki’s Icesave online banking accounts.

Iceland was brought to the brink of bankruptcy when its biggest banks failed four years ago. Now, the site of the world’s most spectacular financial collapse is becoming a pioneer in banking reform, Bloomberg Businessweek reported. “We’ve been burned by this and that’s why we have to look very closely at what we need to do to prevent it happening again,” Economy MinisterSteingrimur J. Sigfusson said in an interview.

Iceland's former central bank chief had warned about the country's over-sized banks before they went bust in 2008, he said on Tuesday at the trial of a former prime minister for failing to prevent the crisis, Reuters reported. David Oddsson was speaking on the second day of witness hearings at the trial of Geir Haarde, the only political leader to face prosecution over the crisis that hit the world economy. He has denied the charges. Iceland's top three banks all collapsed in late 2008 after years of debt-fuelled expansion.

Iceland's former prime minister Geir Haarde went on trial on Monday for failing to prevent the island nation's 2008 financial crash, the only global political leader to face prosecution over the wider crisis which engulfed the world economy, Reuters reported. Iceland's top three banks all collapsed in late 2008 after years of debt-fuelled expansion. The country of just 320,000 people was forced to borrow around $10 billion (6.3 billion pounds) from the International Monetary Fund and other lenders.

Property tycoon Vincent Tchenguiz has reached a confidential settlement in his pursuit of damages from failed Icelandic bank Kaupthing, Reuters reported. London-based Tchenguiz -- one of Britain's best known real estate investors -- said trustees of his family trust and its Euro Group business vehicle had settled all civil claims filed against Kaupthing in July 2010 after the bank's winding-up committee refused to recognise the trust as a priority creditor following its October 2008 demise.

After Iceland's vicious recession, the central bank has managed to stabilise the currency with capital controls, cap inflation and has gotten interest rates down to 4.25% from a peak of 18%, The Wall Street Journal reported. Now, after dipping its toes once again into international capital markets, Mar Gudmundsson, the head of Sedlabanki, the nation's central bank, said in an interview that recent events demonstrate the island nation can function under its own power again.

Iceland's economy is on the mend after the 2008 collapse of its banking system, but the country needs to beef up regulation and oversight of financial firms further to avoid future problems, the OECD said on Tuesday, Reuters reported. Iceland plunged into recession in 2009 after its biggest banks collapsed in the space of a few day when credit dried up globally. The government was powerless because banks' liabilities were eight times greater than the country's gross domestic product.

A majority of Icelanders will block an accord with the U.K. and the Netherlands on depositor guarantees, a Capacent Gallup poll published by RUV showed, Bloomberg reported. The poll showed 52 percent of voters will reject the bill in the April 9 referendum, compared to 54.8 percent in a Frettabladid newspaper poll published earlier today. Forty-eight percent of voters will support the pact on April 9, Capacent’s poll showed, compared to 45.2 percent of voters in the Frettabladid poll.

Probes by the U.K. and Icelandic authorities into the failure Iceland's Kaupthing Bank hf have widened to include Luxembourg, The Wall Street Journal reported. Luxembourg police on Tuesday morning raided the premises of Kaupthing's former premises in Luxembourg at the request of British and Icelandic officials, according to authorities. In total, the searches covered three business premises and two residential properties and were continuing as of early afternoon Tuesday. They involved more than 70 investigators from Luxembourg, the UK and Iceland. U.K.

Embattled tycoon Vincent Tchenguiz's property management company, Peverel Group Ltd, has entered administration after failing to repay a loan, Reuters reported. Bank of America Merrill Lynch demanded repayment within 24 hours of a 124.6 million pounds loan plus 11.4 million pounds in accrued interest, another Vincent Tchenguiz company, Consensus Business Group (CBG), said in a statement.