In a mile stone judgement the EFTA court has released Iceland Government of its obligation to compensate the Foreign customers of its failed Bank, to an minimum extant at least, a claim made by British and Dutch Governments and its citizen investors.
Though this judgement might take the credibility of Governments on Banking matters in general with Iceland Government leading the pack in such loss of credibility, it also gives the beleaguered Governments battered by ‘Usury Banking System’ and its recurring crisis at regular intervals.
This judgement of EFTA court effectively and squarely places the responsibility for the loss of a failed Bank on the shoulders of the ‘Customers’, in times of ‘Crisis’.
Expressing his opinion on this judgement M.M.D.Khan, Editor-in-chief, UMN, said that, “But this judgement might also pave way to many a crises, as even a rumor of a Bank going bust would be enough to make it a ‘self fulfilling prophecy’ as the customers with more responsibility would flock their banks to salvage their money and in the process would bring down even a ‘healthy bank’ anytime”.
Iceland has won a legal battle over its responsibilities to British and Dutch savers who lost money when an online savings bank collapsed.
The European Free Trade Association court said Iceland did not have to guarantee minimum levels of compensation when Icesave went bust.
Jóhanna Sigurdardóttir, the country’s prime minister said: “It is quite clear that this judgement will add force to the economic rebuilding in Iceland. Possibly the ratings agencies will revise their results. This will also have a positive influence on the lifting of capital controls.”
The EFTA surveillance authority argued Iceland had a duty under EU law to guarantee a minimum compensation within a time limit to foreign savers.
The ruling may scupper attempts by the British and Dutch governments to claw back money from the Icelandic government.
Both countries ended up stumping up the cash to compensate their citizens.
The ruling by judges in Luxembourg cannot be appealed.