Open

Coming up

Don't miss

Replay


LATEST SHOWS

THE WORLD THIS WEEK

The World This Week - 22 August 2014 (part 2)

Read more

THE WORLD THIS WEEK

The World This Week - 22 August 2014

Read more

FRANCE IN FOCUS

FRANCE IN FOCUS

Read more

FOCUS

Lifting the veil over China's air pollution

Read more

ENCORE!

Tango Takeover in Paris

Read more

WEB NEWS

Calls for ISIS media blackout after execution of James Foley

Read more

IN THE PAPERS

'Steely resolve of reporters exploited by pared-down employers'

Read more

BUSINESS DAILY

US judge calls Argentina bond swap offer illegal

Read more

IN THE PAPERS

Cécile Duflot ruffles some feathers

Read more

  • Europe launches navigation satellites to rival GPS

    Read more

  • Besieged by problems, Hollande faces unhappy return from summer holidays

    Read more

  • Iraqi Sunnis quit govt talks after mosque massacre

    Read more

  • US demands Russia withdraw aid convoy from Ukraine

    Read more

  • Fed Chair says US job market still hampered by Great Recession

    Read more

  • August 22, 1914: The bloodiest day in French military history

    Read more

  • Central African Republic announces coalition cabinet

    Read more

  • Hamas publicly executes "informers"

    Read more

  • French firebrand leftist to quit party presidency, but not politics

    Read more

  • Fear of Ebola sky-high among Air France workers

    Read more

  • US says Islamic State threat 'beyond anything we've seen'

    Read more

  • Malaysia mourns as remains of MH17 victims arrive home

    Read more

  • Turkish Foreign Minister Davutoglu set to be Erdogan's new PM

    Read more

  • Hollande is ‘nobody’s president’ says former French minister

    Read more

  • Interactive: Relive the Liberation of Paris in WWII

    Read more

Business

Iceland's last independent bank closes down

Video by FRANCE 24

Latest update : 2009-03-10

Icelandic investment bank Straumur Burdaras, the last independent bank in the country, was shut down due to liquidity problems as Iceland continues to battle the effects of the global economic recession. Deposits were covered.

AFP - Investment bank Straumur Burdaras, the last of Iceland's big banks left independent after the state seized control of three others in 2008, said Monday it had been shut down due to liquidity problems.

"In spite of its strong capital position and the support of funding banks, Straumur Burdaras Investment Bank believes that its liquidity position is no longer enough to sustain its activities," the bank said in a statement.

"The Icelandic Financial Supervisory Authority (IFSA) has therefore decided to assume the powers of a meeting of the shareholders of Straumur and immediately suspend the board in its entirety," it said.

"Further, the IFSA hereby appoints a resolution committee, which will take over all authority of the board of directors," it said.

"As a result of this Straumur is closed."

The government took control of Iceland's three biggest banks -- Kaupthing, Landsbanki and Glitnir -- in October after the over-extended financial sector collapsed in the wake of the global credit crunch.

The main shareholder in Straumur was Bjorgolfur Thor Bjorgolfsson, a wealthy and influential businessman who was also one of the main shareholders in Landsbanki, once the country's second-biggest bank.

Straumur, ranked fourth, noted that all deposits of Icelandic commercial banks were fully secured following the government's move last year.

Straumur chief executive William Fall has resigned, effective immediately, the bank said.

Straumur posted a net loss of 574.5 million euros in the fourth quarter, registering client-driven income of just 35.9 million euros.

In February, it took over bankrupt rival Baugur's holdings in Danish department stores Illum and Magasin du Nord, as well as a several other investments in Denmark.

According to the financial authorities, the bank was to have paid 33 million euros in debt due Monday but had only 15.3 million euros available.

The Nordic stock exchanges suspended Straumur.

Iceland, a North Atlantic island of 320,000 people that is not a member of the European Union, saw its centre-right government resign at the end of January amid massive public protests over the country's economic crisis.

An interim left-wing government has been in power since early February and elections are expected to be called soon for April 25.

Icelandic business daily Vidskiptabladid said the fall of Straumur may in the short term weaken the Icelandic currency, the krona.

However, it speculated that in the long term, it may strengthen the currency as capital outflows to cover Straumur's foreign debt may be less.

Business Affairs Minister Gylfi Magnusson said it "was clear late last year that Straumur's situation was difficult. They lost a great deal then.

"They have, on the other hand, survived until now and people had some hope that they could continue."

He said he did not believe the bank's collapse would lead to an increase in public debt as there were no state guarantees, except on deposits, and no state claims.

He said he hoped the bank's assets would cover deposits.
 

Date created : 2009-03-10

COMMENT(S)