We know what sort of management Glitnir is under. Birna Einarsdottir is allowed to manage the bank although she manages to lose track of 200 million of her own money.
We know that Glitnir’s owners borrowed money from the bank to finance leveraged acquisitions in other sectors, skewing the competitiveness of the market greatly. We also know they borrowed money to put into shelf companies that would then buy stock in the bank itself and FL Group which also belonged to the owners, creating artificial prices on the stock exchange.
An acquaintance is seething with anger. He lost his business because the interest payments became unbearable. Most businesses are unable to withstand interests on capital of 18-28%, and 30-100% fluctuations in the currency for a long period. For a while he just took it on the chin, accepting that he had failed in the business.
Now his is stunned to learn that while he and his group of investors borrowed 300 million ISK from Glitnir with expensive collateral on the line, some of which was lost when they lost the business, other people are apparantly able to walk into the bank and borrow 2 billion ISK without any collateral at all.
Free market? More like one middle finger firmly stuck in the air at those stupid enough to participate by the rules.
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Roy
3 years ago
Picture Glitnir as having been one giant piggy bank that could be used by a select few. Georg Orwellsson was right when he said that “All Icelanders are equal, but some are more equal than others”.
Roy
3 years ago
The more you think about it the more pissed you get. You have way too much money if you can lose track of 200 million!