Former Icelandic PM Haarde addresses Hamburg Summit

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Geir Haarde, former prime minister of Iceland and ambassador designate to the US discussed lessons from the Icelandic banking crisis and the state of the recovery at the InvestmentEurope Pan European Fund Selector Summit in Hamburg.

Haarde stressed that the Icelandic experience differs from many eurozone countries since it was not a sovereign debt crisis, but a clear failure of the banking sector. He strongly criticized incestuous lending practices between Icelandic banks and claimed that the majority of Icelands bank losses were not nationalised, “banks must assume responsibility for the risks they took” he said.

He also expressed criticism towards the 2008 measures of the UK government to freeze Icelandic assets stating that “the Brown government clearly confused the actions of Icelandic banks with those of the Icelandic government.”

Looking ahead, Haarde stressed the continued dangers represented by the shadow banking sector and the need to improve European supervisory bodies in order to prevent future crises. He also sees investor opportunities in refinancing Icelandic banks. “Two of the three Icelandic banks are now completely owned by creditors and one will be privatized, investors should be invited to take ownership of these banks” he said.

Haarde was Icelandic prime minister for the Icelandic Independence Party between 2006 and 2009. He became the first Icelandic prime minister to be indicted for misconduct in office during the banking crisis in 2010 but was cleared of 5 out of six charges. He was found guilty of failing to hold emergency cabinet meetings in the run up to the crisis. He will be Icelandic ambassador to the US as of 2015.

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