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Iceland: Parliamentary Panel Blames Officials for Role in Financial Collapse

(Apr. 13, 2010) On April 12, 2010, a Special Investigation Committee of the Althingi, Iceland's parliament, released a special report on the collapse in 2008 of the country's financial system. (Available in Icelandic, together with excerpts in English entitled Report of the Special Investigation Commission (SIC), Althingi website, (last visited Apr. 12, 2010).) The report concluded that seven government officials were grossly negligent in their oversight of the financial system before the breakdown. (Andrew Morgan, Iceland Parliament Committee Implicates Former PM, Bank Chief in Banking Crisis, PAPER CHASE NEWSBURST, Apr. 12, 2010, available at

The Committee had been established in December 2008 by the Althingi (Act No. 142/2008, SIC Report, supra) to investigate what happened at that time to the three largest banks in the country, Kaupthing, Landsbanki, and Glitnir. It found that Geir Haarde, who was Prime Minister then, and David Oddsson, who headed the central bank, were aware of the overseas debt assumed by the banks and did nothing to counteract the potential problems of this development. The Committee also blamed the Minister of Finance, the Minister of Banking, the Financial Services Authority, and two Central Bank officials of the time for not reacting appropriately when informed of the weak state of Iceland's financial sector. (Morgan, supra.) A parliamentary panel will be established to determine what (if any) legal action should be taken against these seven former officials. (Id.)

At the time the government took over control of the three banks in 2008, their debt was 900% of the country's gross domestic product.. Iceland's economy collapsed and loans from the International Monetary Fund were needed for the government to pay its bills. (Id.)