Brown sparks Icelandic Revolt

The overwhelming referendum NO vote in the Iceland to the bank compensation deal was both predictable and justified. It is difficult not to sympathise with ordinary Icelandic citizens outraged at having to pay up for the misdeeds of a few Icelandic bankers, the greed of UK investors, and the lack regulatory control produced by Gordon Brown. They were rightly infuriated that, in response to the collapse of Icesave, Brown froze Icelandic assets under dodgy UK terrorism law. His move made sure that other Icelandic banks also went bust since all their assets in London were frozen. Brits who put their cash into Icesave knew they were taking a risk. It was paying interest well above the market rate. It was registered as a UK bank, so investors were only covered up to £30,000 under the government’s compensation scheme but many piled in much more. Alastair Darling did not need to compensate for anything beyond £30,000 but he did paying all capital lost plus interest. The reason for this staggering largess was the looming election and the need to cover the fact that it was Gordon Brown’s disastrous change to banking oversight which was  chiefly to blame for UK losses.

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