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76-469: Alterra may refer to: Alterra Power , a Canadian energy company Alterra Coffee Roasters, a house brand of Lavazza 's Flavia Beverage Systems single-serve coffee container business. This brand was the former name of Colectivo Coffee Roasters . Alterra Mountain Company , a North American ski resort operator Alterra Corporation, a fictional corporation in

152-513: A complaint to Norwegian police concerning the alleged embezzlement of 415 million Norwegian kroner (€47 million) by Glitnir since 2006. The Icelandic bank had acted as an agent for Eksportfinans, administering loans to several companies: however Eksportfinans alleges that, when the loans were paid off early by borrowers, Glitnir kept the cash and merely continued with the regular payments to Eksportfinans, effectively taking an unauthorized loan itself. Trading in shares of six financial companies on

228-412: A gradually declining trend for the unemployment rate. The government budget deficit has declined from 9.7% of GDP in 2009 and 2010 to 0.2% of GDP in 2014; the central government gross debt-to-GDP ratio was expected to decline to less than 60% in 2018 from a maximum of 85% in 2011. The Icelandic króna declined more than 35% against the euro from January to September 2008. Inflation of consumer prices

304-616: A licence under the Landsbanki Freezing Order 2008 to allow the London branch of Landsbanki to continue some business. A second licence was issued on 13 October, when the Bank of England provided a £100 million secured loan to Landsbanki "to help maximise the returns to UK creditors". On 12 October the Norwegian government took control of Kaupthing's Norwegian operations, including "all of

380-513: A million depositors lost access to their accounts in foreign branches of Icelandic banks. This led to the 2008–2013 Icesave dispute , which ended with an EFTA Court ruling that Iceland was not obliged to repay Dutch and British depositors minimum deposit guarantees . In an effort to stabilize the situation, the Icelandic government stated that all domestic deposits in Icelandic banks would be guaranteed, imposed strict capital controls to stabilize

456-464: A new and an old bank in order to avoid a credit crunch . The new state-owned banks took over the domestic activities and have been recapitalised by government with a capital ratio of 16% of all assets. The Financial Supervisory Authority (FME) has acted to "ring-fence" the Icelandic operations of Landsbanki and Glitnir, stating its aim of "continued banking operations for Icelandic families and businesses". NBI (originally known as Nýi Landsbanki )

532-533: A radical restructuring of the organisation which is intended to minimise the bank's international operations. Similar job losses are expected at Glitnir and Kaupthing The job losses can be compared with the 2,136 registered unemployed and 495 advertised vacancies in Iceland at the end of August 2008. Other companies have also been affected. For example, the private Sterling Airlines declared bankruptcy on 29 October 2008. The national airline Icelandair has noticed

608-409: A record high of 18.6%. In September 2008, internal documents from Kaupthing , the largest bank in Iceland, were leaked to WikiLeaks . On 29 September 2008, a plan was announced for the bank Glitnir to be nationalised by the Icelandic government with the purchase of a 75% stake for €600 million. The government stated that it did not intend to hold ownership of the bank for a long period, and that

684-434: A relatively healthy balance, with sovereign debt of 28% of GDP and a budget surplus of 6% of GDP (2007). More recently, the estimated 2011 debt was 130% of GDP with a budget deficit of 6% of GDP. In addition, the value of foreign currency bonds which matured in the remainder of 2008 was only $ 600 million, and foreign currency debt service in 2009 was only $ 215 million, well within the government's ability to pay. However

760-550: A serious negative impact on the Icelandic economy . The national currency fell sharply in value, foreign currency transactions were virtually suspended for weeks, and the market capitalisation of the Icelandic stock exchange fell by more than 90%. Iceland underwent a severe economic depression . Its gross domestic product dropped by 10% in real terms between the third quarter of 2007 and the third quarter of 2010. A new era with positive GDP growth started in 2011, and has helped foster

836-435: A severe recession and the 2009 Icelandic financial crisis protests . In the years preceding the crisis, three Icelandic banks, Kaupthing , Landsbanki and Glitnir , multiplied in size. This expansion was driven by ready access to credit in international financial markets, in particular money markets . As the 2007–2008 financial crisis unfolded, investors perceived the Icelandic banks to be increasingly risky. Trust in

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912-437: A significant slump in domestic demand for flights. However, the airline states that year-on-year international demand is up from last year. Guðjón Arngrímsson, a spokesman for the airline, said "we're getting decent traffic from other markets... we are trying to let the weak króna help us." He has also stated that it is impossible to predict whether the company will be profitable this year. Morgunblaðið , an Icelandic newspaper,

988-484: A situation, a bank would normally have to ask for a loan from the central bank as the lender of last resort . However, in Iceland the banks were so much larger than the national economy that the Central Bank of Iceland and the Icelandic government could not guarantee the payment of the banks' debts, leading to the collapse of the banks. The official reserves of the Central Bank of Iceland stood at 374.8 billion krónur at

1064-514: A solar project in Ontario. East Toba River (123MW) and Montrose Creek (73MW) are two run-of-river hydroelectric plants 18 km apart, they have operated since in 2010 with a combined capacity of 196 MW and generate an average of 720 GWh of electricity annually, which is contracted to B.C. Hydro until 2045. The Upper Toba Valley Hydroelectric project originally planned two renewable power facilities constructed 90 km north of Powell River, BC at

1140-465: A statement from the bank on 10 October, which said "Landsbanki Íslands hf. transferred substantial funds to its UK branch during this time to fulfil its Icesave commitments." The transfer of funds from Landsbanki Guernsey to Heritable Bank , a Landsbanki subsidiary in the UK, also suggests a bank run in the UK. A transfer of "substantial funds" from Iceland to the UK would have been a significant downward push on

1216-573: A total capacity of 50 MW, divided between Amherstburg (10MW), Belmont (20MW) and Walpole (20MW). This represents a first venture into solar power for Plutonic Power although engineering, procurement, construction and operation will still be provided by First Solar. In 2010, during the Icelandic financial crisis , Magma Energy acquired 98.5% of shares in the Icelandic geothermal power company HS Orka . The deal created an opposition in Iceland . On May 21, 2010 Icelandic singer Björk wrote an open letter in

1292-679: A total of €1.5 billion. Iceland is also seeking assistance from the European Central Bank (ECB): there is some precedent for the move, as the ECB already has currency swap arrangements with Switzerland, another non-member of the European Union . On 24 October, the IMF tentatively agreed to lend €1.58 billion. However the loan had still not been approved by the executive board of the IMF on 13 November. Due to

1368-688: Is different from Wikidata All article disambiguation pages All disambiguation pages Alterra Power On 7 March 2011, it was announced that Magma Energy and Plutonic Power would merge to create Alterra Power Corp. Magma Energy was renamed Alterra Power and each shareholder of Plutonic Power received 2.38 shares of Magma for each Plutonic share held. At the time, the merged company owned two geothermal power plants in Iceland , and one in Nevada (since sold), one run of river hydro plant and one wind farm in British Columbia and an option on

1444-519: Is in freefall." These articles spooked investors discussing Icesave (the brand name of Landsbanki in the UK and the Netherlands) in online forums and many started moving their savings out of the Internet bank. Problems with access to the site hinted at a run on savings. On 6 October, a number of private interbank credit facilities to Icelandic banks were shut down. Prime Minister Geir Haarde addressed

1520-607: The Banking (Special Provisions) Act 2008 first to transfer retail deposits from Heritable Bank to a Treasury holding company, then to sell them to Dutch bank ING Direct for £1 million. The same day, the FME also placed Glitnir into receivership. That afternoon, there was a telephone conversation between Icelandic Finance Minister Árni Mathiesen and UK Chancellor of the Exchequer Alistair Darling . That evening, one of

1596-682: The Exchequer also said that the UK government would foot the entire bill to compensate UK retail depositors, estimated at £4 billion. It is reported that more than £4 billion in Icelandic assets in the UK have been frozen by the UK government. The UK Financial Services Authority (FSA) also declared Kaupthing Singer & Friedlander , the UK subsidiary of Kaupthing Bank , in default on its obligations, sold Kaupthing Edge , its Internet bank, to ING Direct, and put Kaupthing Singer & Friedlander into administration. Over £2.5 billion of deposits for 160,000 customers were sold to ING Direct. The scale of

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1672-488: The OMX Nordic Iceland Exchange was suspended on 6 October by order of the FME. On Thursday 9 October, all trading on the exchange was frozen for two days by the government "in an attempt to prevent further panic spreading throughout the country's financial markets". The decision was made to do so due to "unusual market conditions", with share prices having fallen 30% since the start of the month. The closure

1748-637: The Swiss Federal Banking Commission . The directors of Kaupthing's subsidiary on the Isle of Man decided to wind up the company after consultation with the Manx authorities. The Finnish Financial Supervision Authority, Rahoitustarkastus , announced having taken control of Kaupthing's Helsinki branch already on 6th, to prevent money from being sent back to Iceland. On the same day, the UK Treasury issued

1824-459: The interbank lending market and, more recently, by deposits from outside Iceland (which are also a form of external debt). Households also took on a large amount of debt, equivalent to 213% of disposable income , which led to inflation. This inflation was exacerbated by the practice of the Central Bank of Iceland issuing liquidity loans to banks on the basis of newly issued, uncovered bonds – effectively, printing money on demand. In response to

1900-529: The 62MW Jimmie Creek facility. In 2016 Alterra Power Corp. announced that the Jimmie Creek facility had achieved its full output of 62 MW. It is located at 50°34′08″N 124°04′21″W  /  50.568962°N 124.072627°W  / 50.568962; -124.072627 In early 2011, Plutonic Power agreed, together with GE Energy financial Services, to purchase three proposed photovoltaic power plants in Ontario from First Solar . The three plants will have

1976-458: The Bank of England for help. The UK Financial Services Authority (FSA) was aware of the risk, and was considering imposing special liquidity requirements on Icelandic deposit-taking banks in the weeks before the crisis. However the plan – which was never implemented – would have forced the Icelandic banks to cut interest rates or stop taking new deposits, and might even have sparked the sort of bank run it

2052-548: The Bank's difficulties has been the placing of funds with its UK fellow subsidiary, Heritable Bank ." Guernsey's Chief Minister stated "the directors of Landsbanki Guernsey took appropriate steps by putting the bank into administration." The FME placed Landsbanki in receivership early on 7 October. A press release from the FME stated that all of Landsbanki's domestic branches, call centres, ATMs and internet operations will be open for business as usual, and that all "domestic deposits" were fully guaranteed. The UK government used

2128-527: The District Court of Reykjavík on 24 November. The rescue operations of the central bank along with the restructuring and recapitalization of the banks increased the public debt ratio by about 20 percentage points of GDP. The 2008 economic climate in the country has affected many Icelandic businesses and citizens. With the creation of Nýi Landsbanki , the new organisation which replaces the old Landsbanki , around 300 employees will lose their jobs due to

2204-537: The FME's takeover of the last major Icelandic bank, and thus the loss of all króna trade ' clearing houses '. The next day, the central bank introduced restrictions on the purchase of foreign currency within Iceland. From 9 October to 5 November, the European Central Bank quoted a reference rate of 305 krónur to the euro. The Central Bank of Iceland set up a temporary system of daily currency auctions on 15 October to facilitate international trade. The value of

2280-561: The Government of Iceland. The freezing order took advantage of provisions in sections 4 and 14 and Schedule 3 of the Anti-terrorism, Crime and Security Act 2001 , and was made "because the Treasury believed that action to the detriment of the UK's economy (or part of it) had been or was likely to be taken by certain persons who are the government of or resident of a country or territory outside

2356-472: The Icelandic government to purchase a 75% stake had been approved by shareholders. The announced nationalisation of Glitnir came just as the United Kingdom government was forced to nationalise Bradford & Bingley and to sell its retail operations and branch network to Grupo Santander . Over the weekend of 4–5 October, British newspapers carried many articles detailing the nationalisation of Glitnir and

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2432-663: The Netherlands and the United Kingdom announced a joint loan of $ 6.3bn (€5bn), related to the deposit insurance dispute. In 2001, banks were deregulated in Iceland. This set the stage for banks to upload debts when foreign companies were accumulated. The crisis unfolded when banks became unable to refinance their debts. It is estimated that the three major banks held foreign debt in excess of €50 billion, or about €160,000 per Icelandic resident, compared with Iceland's gross domestic product of €8.5 billion. As early as March 2008,

2508-483: The Netherlands. The IMF-led package of $ 4.6bn was finally agreed on 19 November, with the IMF loaning $ 2.1bn and another $ 2.5bn of loans and currency swaps from Norway, Sweden, Finland and Denmark. In addition, Poland has offered to lend $ 200M and the Faroe Islands have offered $ 50M, about 3% of Faroese GDP. The Icelandic government reported that Russia offered to lend $ 500M, and Poland, $ 200M. The next day, Germany,

2584-463: The OMX Iceland 15) remains suspended. After a week of very thin trading, the OMX Iceland 15 closed on 17 October at 643.1, down 93% in króna terms and 96% in euro terms from its historic high of 9016 (18 July 2007). Trading in the shares of two financial services companies, Straumur–Burðarás and Exista, resumed on 9 December: together the companies account for 12.04% of the OMX Iceland 15. The values of

2660-436: The UK". The UK Prime Minister, Gordon Brown, announced that the UK government would launch legal action against Iceland over concerns with compensation for the estimated 300,000 UK savers. Geir Haarde said at a press conference on the following day that the Icelandic government was outraged that the UK government applied provisions of anti-terrorism legislation to it in a move they dubbed an "unfriendly act". The Chancellor of

2736-501: The agencies believed that the government would have to issue more foreign currency bonds, both to cover losses as the banks' overseas operations are liquidation and also to stimulate demand in the domestic economy as Iceland goes into recession. A team of experts from the International Monetary Fund (IMF) arrived in Iceland at the start of October 2008 for talks with the government. Industry Minister Össur Skarphéðinsson

2812-400: The bank was expected to carry on operating as normal. According to the government, the bank "would have ceased to exist" within a few weeks if there had not been intervention. It later turned out that Glitnir had US$ 750 million of debt due to mature on 15 October. However, the nationalization of Glitnir never went through, as it was placed in receivership by the FME before the initial plan of

2888-548: The bank's assets and liabilities in Norway". On 21 October, the Central Bank of Iceland asked the remaining independent financial institutions for new collateral against their loans. This was to replace the shares in Glitnir, Landsbanki and Kaupthing which had been pledged as collateral previously and which were now of much lower value, if not worthless. The value of the collateral was estimated at 300 billion krónur (€2 billion). One of

2964-615: The banking system failed. On 6 October, the Icelandic legislature instituted an emergency law which enabled the Financial Supervisory Authority (FME) to take control over financial institutions and made domestic deposits in the banks priority claims. In the following days, new banks were founded to take over the domestic operations of Kaupthing, Landsbanki and Glitnir. The old banks were put into receivership and liquidation, resulting in losses for their shareholders and foreign creditors . Outside Iceland, more than half

3040-451: The banks gradually faded, leading to a sharp depreciation of the Icelandic króna in 2008 and increased difficulties for the banks in rolling over their short-term debt. At the end of the second quarter of 2008, Iceland's external debt was 9.553 trillion Icelandic krónur (€50 billion), more than 7 times the GDP of Iceland in 2007. The assets of the three banks totaled 14.437 trillion krónur at

3116-415: The banks, Sparisjóðabanki (SPB, also known as Icebank), stated the next day that it could not provide new collateral for its 68 billion krónur (€451 million) loan, and would have to turn to the government for help. "This problem won't be solved in any other way," said CEO Agnar Hansson. On 24 October, it emerged that a Norwegian export credit company ( Eksportfinansiering  [ no ] ) had made

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3192-496: The control of any regulator and starving the onshore market of foreign currency. Hence the Central Bank had to sell €124 million of currency reserves in November 2008 to make up the difference, compared with an estimated trade surplus of €13.9 million. The last currency auction was held on 3 December. The domestic interbank foreign exchange market reopened the following day with three market makers , all of them government-owned. On

3268-589: The cost of private deposit insurance for deposits in Landsbanki and Kaupthing was already far higher (6– 8 + 1 ⁄ 2 % of the sum deposited) than for other European banks. The króna, which was ranked by The Economist in early 2007 as the most overvalued currency in the world (based on the Big Mac Index ), has further suffered from the effects of carry trading . Coming from a small domestic market, Iceland's banks have financed their expansion with loans on

3344-403: The delay Iceland found itself caught in a classic catch-22 situation, loans from other countries could not be secured until the IMF program had been approved. The Icelandic government spoke of a $ 500M (€376M) gap in the funding plans. Dutch finance minister Wouter Bos stated that the Netherlands would oppose the loan unless agreement was reached over deposit insurance for Landsbanki customers in

3420-481: The end of September 2008, compared with 350.3 billion krónur of short-term international debt in the Icelandic banking sector, and at least £6.5 billion (1,250 billion krónur) of retail deposits in the UK. The situation was made worse by the fact that Icesave was operating as a branch of Landsbanki, rather than as a legally independent subsidiary. As such, it was completely dependent on the Central Bank of Iceland for emergency loans of liquidity , and could not turn to

3496-510: The end of the second quarter 2008, equal to more than 11 times the national GDP. Due to the huge size of the Icelandic financial system in comparison with the Icelandic economy, the Central Bank of Iceland was unable to act as a lender of last resort during the crisis, further aggravating the mistrust in the banking system. On 29 September 2008, it was announced that Glitnir would be nationalised. However, subsequent efforts to restore faith in

3572-612: The event that a bank had to be liquidated . In a separate measure, retail deposits in Icelandic branches of Icelandic banks were guaranteed in full. The emergency measures had been deemed unnecessary by the Icelandic government less than 24 hours earlier. That evening, the Guernsey subsidiary of Landsbanki went into voluntary administration with the approval of the Guernsey Financial Services Commission . The administrators would later say that "The main reason for

3648-571: The first two days of domestic trading, the króna climbed to 153.3 to the euro, up 22% against the last currency auction rate. In January 2009, the exchange rate of Icelandic króna against Euro seemed to be more stabilized compared with the situation in October 2008, with the lowest rate at 177.5 krónur per EUR on 1, 3 and 4 January 2009, and the highest at 146.8 on 30 January 2009. In the meantime, however, Iceland's 12-month inflation in January 2009 climbed to

3724-565: The game Subnautica Colectivo Coffee Roasters , an American café chain that was formerly known as Alterra Coffee Roasters Topics referred to by the same term [REDACTED] This disambiguation page lists articles associated with the title Alterra . If an internal link led you here, you may wish to change the link to point directly to the intended article. Retrieved from " https://en.wikipedia.org/w/index.php?title=Alterra&oldid=1258710070 " Category : Disambiguation pages Hidden categories: Short description

3800-512: The governors of the Central Bank of Iceland, Davíð Oddsson , was interviewed on Icelandic public service broadcaster RÚV and stated that "we [the Icelandic State] do not intend to pay the debts of the banks that have been a little heedless". He compared the government's measures to the U.S. intervention at Washington Mutual , and suggested that foreign creditors would "unfortunately only get 5–10–15% of their claims". Darling announced that he

3876-548: The headwaters of Toba Inlet the first is on Jimmie Creek which flows west into Toba River and the second on the Upper Toba River. Installed capacity of the two facilities was to be 124 MW with an expected annual energy generation of 316 GW hr/yr. Alterra received an Energy Purchase Agreement from BC Hydro to construct the Upper Toba facility. In 2013 Alterra also received an Energy Purchase Agreement from BC Hydro to construct

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3952-484: The high leverage of Iceland's other banks. Influential BBC business editor Robert Peston published an opinion piece on the banks, stating that debt insurance for Kaupthing required a premium of £625,000 to guarantee the return of £1 million: "the worst case of financial BO I've encountered in some time" was his graphic description. The Guardian said "Iceland is on the brink of collapse. Inflation and interest rates are raging upwards. The krona, Iceland's currency,

4028-431: The króna is determined by supply and demand in these auctions. The first auction sold €25 million at a rate of 150 krónur to the euro. Commercial króna trading outside Iceland restarted on 28 October, at an exchange rate of 240 krónur to the euro, after Icelandic interest rates had been raised to 18%. The foreign exchange reserves of the Central Bank of Iceland fell by US$ 289 million during October 2008. During November,

4104-506: The loan was still being negotiated. According to RÚV, prime minister Geir Haarde had been investigating the possibility of a Russian loan since the mid-summer. When questioned on the matter in a press conference, Geir Haarde said: "We have not received the kind of support that we were requesting from our friends. So in a situation like that one has to look for new friends." A team of Icelandic negotiators arrived in Moscow on 14 October to discuss

4180-475: The nation in a speech that became infamous for its portentous closing words: ' God bless Iceland '. He announced a package of new regulatory measures which were to be put to the Althing , Iceland's parliament, immediately, with the cooperation of the opposition parties. These included the power of the FME to take over the running of Icelandic banks without nationalising them, and preferential treatment for depositors in

4256-561: The net value of the transferred assets, as determined by "recognised appraisers". As of 14 November 2008, these net values were estimated as: NBI ISK558.1bn (€3.87bn), Nýi Glitnir ISK442.4bn (€2.95bn); Nýja Kaupþing ISK172.3bn (€1.14bn). The total debt of 1173 billion krónur is more than 90% of Iceland's 2007 gross domestic product. The international businesses remained with the old banks for winding up. Glitnir and Kaupthing, shorn of their Icelandic operations, obtained moratoria on payments to creditors (similar to USA Chapter 11 protection) from

4332-579: The newspaper Reykjavík Grapevine , calling on the Icelandic government to "do everything in its power to revoke the contracts with Magma Energy". The deal was approved by the Icelandic Government. In 2016, Alterra owned 67%, while the Icelandic pension funds held 33%. In 2019 Alterra sold off its shares in HS Orka to Macquarie Infrastructure and Real Assets (MIRA). 2008%E2%80%932012 Icelandic financial crisis The Icelandic financial crisis

4408-401: The possible loan. Russian deputy finance minister Dmitri Pankin said that "The meeting took place in a friendly atmosphere.... We are working thoroughly on the issue to take a final decision". On the same day, the Central Bank of Iceland drew on its swap facilities with the central banks of Denmark and Norway for €200 million each. Iceland has swap facilities with the other Nordic countries for

4484-399: The real exchange rate (discounting inflation) of the Icelandic króna, as quoted by the Central Bank of Iceland, was roughly one-third lower than the average rate from 1980 to 2008, and 20% lower than the historical lows during the same period. The external rate as quoted by the European Central Bank was lower still. On the last trading day of the month, 28 November, the Central Bank of Iceland

4560-416: The rise in prices – 14% in the twelve months to September 2008, compared with a target of 2.5% – the Central Bank of Iceland held interest rates high (15.5%). Such high interest rates, compared with 5.5% in the United Kingdom or 4% in the eurozone for example, encouraged overseas investors to hold deposits in Icelandic krónur, leading to monetary inflation : the Icelandic money supply (M3) grew 56.5% in

4636-540: The run on Kaupthing Edge deposits had been such that many transactions were not completed until 17 October. Although Geir Haarde has described the UK government's actions over Kaupthing Singer & Friedlander as an "abuse of power" and "unprecedented", they were the third such actions taken under the Banking (Special Provisions) Act 2008 in less than ten days, after interventions in Bradford & Bingley and Heritable Bank. On

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4712-521: The same day, the Sveriges Riksbank , Sweden's central bank, made a credit facility of 5 billion Swedish krona (€520 million) available to Kaupthing Bank Sverige AB, the Swedish subsidiary of Kaupthing. The loan was to pay "depositors and other creditors". On 9 October, Kaupthing was placed into receivership by the FME, following the resignation of the entire board of directors. The bank said that it

4788-484: The shares in both companies dropped sharply, and the index closed at 394.88, down by 40.17% on the day. Trading in shares in SPRON and Kaupthing remains suspended, at prices of 1.90 krónur and 694.00 krónur respectively. The four credit rating agencies which monitor Iceland's sovereign debt all lowered their ratings during the crisis, and their outlook for future ratings changes became negative. The Icelandic government had

4864-436: The twelve months to September 2008, compared with 5.0% GDP growth. The situation was effectively an economic bubble , with investors overestimating the true value of the króna. As with many banks around the world, the Icelandic banks found it increasingly difficult or impossible to roll over their loans in the interbank market , their creditors insisting on payment while no other banks were willing to make fresh loans. In such

4940-463: The value of the Icelandic króna, and secured a US$ 5.1bn sovereign debt package from the IMF and the Nordic countries in order to finance a budget deficit and the restoration of the banking system. The international bailout support programme led by IMF officially ended on 31 August 2011, while the capital controls which were imposed in November 2008 were lifted on 14 March 2017. The financial crisis had

5016-501: The value of the króna, even before the effects of any speculation. Wholesale funding disappeared in September 2008 leading to the collapse of Glitnir, Kaupthing and Landsbanki. Due to the size of the combined balance sheet of those banks the government of Iceland did not have the means to save those banks. They were put into receivership instead with their boards replaced. Nevertheless, the failed banks were restructured by dividing them into

5092-517: Was a major economic and political event in Iceland between 2008 and 2010. It involved the default of all three of the country's major privately owned commercial banks in late 2008, following problems in refinancing their short-term debt and a run on deposits in the Netherlands and the United Kingdom . Relative to the size of its economy, Iceland's systemic banking collapse was the largest of any country in economic history. The crisis led to

5168-472: Was designed to prevent. The Guernsey authorities were also planning on bringing in restrictions on foreign banks operating as branches and on transfers of funds between Guernsey subsidiaries and parent banks ("parental upstreaming"). Landsbanki operated in Guernsey through a legally independent subsidiary. The existence of a bank run on Landsbanki accounts in the UK in the period up to 7 October seems confirmed by

5244-445: Was estimated at this time that foreign investors held some €2.9 billion in króna-denominated securities, popularly known as "glacier bonds". The foreign exchange rules also oblige Icelandic residents to deposit any new foreign currency they receive with an Icelandic bank. There is anecdotal evidence that some Icelandic exporters had been operating an informal offshore foreign exchange market, trading pounds and euros for krónur outside

5320-582: Was extended through Monday 13 October due to continuing "unusual market conditions". The market reopened on 14 October with the main index, the OMX Iceland 15 , at 678.4, which corresponds to a plunge of about 77% compared with 3,004.6 before the closure. This reflects the fact that the value of the three big banks, which form 73.2% of the value of the OMX Iceland 15, had been set to zero. The values of other equities varied from +8% to −15%. Trading in shares of Exista , SPRON and Straumur-Burðarás (13.66% of

5396-488: Was in technical default on its loan agreements after its UK subsidiary had been placed into administration. Kaupthing's Luxembourg subsidiary asked for, and obtained, a suspension of payments (similar to chapter 11 protection ) in the Luxembourg District Court. Kaupthing's Geneva office, which was a branch of its Luxembourg subsidiary, was prevented from making any payments of more than 5000 Swiss francs by

5472-462: Was quoting 182.5 krónur to the euro, while the European Central Bank was quoting 280 krónur to the euro. On 28 November, the Central Bank of Iceland and the Minister for Business Affairs agreed on a new set of currency regulations, replacing the central bank's restrictions imposed early on in the crisis. Movements of capital to and from Iceland were banned without a license from the central bank. It

5548-415: Was running at 14%, and Iceland's interest rates had been raised to 15.5% to deal with the high inflation. On the night of Wednesday, 8 October 2008, the Central Bank of Iceland abandoned its attempt to peg the Icelandic króna at 131 krónur to the euro after trying to set this peg on 6 October. By 9 October, the Icelandic króna was trading at 340 to the euro when trading in the currency collapsed due to

5624-548: Was said to be "favourable" to help from the IMF to stabilise the króna and to allow interest rates to be lowered. On 7 October, the central bank of Iceland announced that they had been in talks with the Russian ambassador to Iceland, Victor I. Tatarintsev , over a €4 billion loan from Russia. The loan would be given across three or four years, with an interest rate of 30 to 50 basis points (0.3% to 0.5%) above LIBOR . Central Bank of Iceland governor Davíð Oddsson later clarified that

5700-492: Was set up on 9 October with 200 billion krónur in equity and 2,300 billion krónur of assets. Nýi Glitnir was set up on 15 October with 110 billion krónur in equity and 1,200 billion krónur of assets. Nýja Kaupþing was set up on 22 October with 75 billion krónur in equity and 700 billion krónur of assets. The equity in all three new banks was supplied by the Icelandic government, and amounted to 30% of Iceland's GDP. The new banks will also have to reimburse their predecessors for

5776-401: Was taking steps to freeze the assets of Landsbanki in the UK. The Landsbanki Freezing Order 2008 was passed at 10 am on 8 October 2008 and came into force ten minutes later. Under the order the UK Treasury froze the assets of Landsbanki within the UK, and introduced provisions to prevent the sale or movement of Landsbanki assets within the UK, even if held by the Central Bank of Iceland or

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