Iceland’s New Deposits Deal
A new bill concerning Iceland’s deposits deal was put before parliament today. The island has agreed to pay back Britain and the Netherlands billions in deposits lost during the credit …
Britain and the Netherlands objected to terms in the original law passed in August. That meant the Icelandic government’s repayment guarantee would run out in 2024. But under the new terms, if the money isn’t repaid by that date, the repayment period will be extended in five-year blocks.
Britain and the Netherlands also agreed that Iceland can seek a court ruling as to whether its Depositors‘ and Investors‘ Guarantee Fund has first claim on whatever is recovered from collapsed bank Landsbanki. The depositors in Britain and the Netherlands had to be bailed out by the two countries.
Iceland’s banks collapsed in late 2008 at the height of the credit crunch. As its economy imploded, it left the island dependent on a 10 billion U.S. dollar aid package headed by the International Monetary Fund.