Vocabulary !!
referendum- a legislative act is referred for final approval to a popular vote by the electorate
reimburse - pay back for some expense incurred
compensation- something (such as money) given or received as payment or reparation (as for a service or loss or injury)
wordnetweb.princeton.edu/perl/webwn
Icesave is owned by Landsbanki, Iceland's second largest bank, which has been swept up in the financial chaos that has engulfed the tiny Arctic country. It collapsed on October 7, 2008 and had to be run by the Icelandic Financial Services Authority. The British (UK) and Dutch (Netherlands) governments then promised to insure savers' deposits by loaning money and a deal was established for Iceland to pay the money back. This collapse affected more than 320,000 people. They loaned the Icelandic bank 3.8bn euros which is equivalent to 5.1908 billion U.S. dollars. Before this action the Iceland Parliament had approved this plan. Chancellor Alistair Darling has said that the UK would indeed get its money back, but it may be a while before they do. He says that it may be many, many years for Iceland to reimburse them. There was recently a poll give to the Icelanders on whether or not they should repay the money and 93% of them voted no! Less than just 2% supported the plan, while the others votes were invalid. Many citizens were upset because they feel that although this plan helped them and their finances, that it was not their fault in the beginning that the Icesave Bank collapsed. They feel that the bank should be responsible for repaying the aid all because a few greedy people. Some simply want to repay their debts but do not want to go bankrupt doing so. It was suggested that they focus on finishing up the deal/ negotiations with the British and Dutch governments. Before the vote, the Iceland government felt they could avoid the rowdy vote (protest) by creating a new agreement. But it did not work, citizens were still upset. Another reason why Icelanders are hesitant to repay the UK is because they have some built up anger and an ongoing grudge from previous times. During the cod wars, Britain had used their battleships against them, even after the Icelandic people had sacrificed the lives of their seamen during World War II. The Reykjavik (Iceland) government approved the repayment plan last December but it was blocked by President Grimsson in January, which led to the referendum being called. I think that despite what the people want they will be responsible for paying them back. I do not think they will be forced too, but Icesave may increase prices and to help the overall economy the government may increase taxes. What do you think should happen? How would you feel if you banked with Icesave and would have to reimburse the UK for your bank's decisions?
http://news.bbc.co.uk/2/hi/business/8553979.stm
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Why was Icesave "swept up in financial chaos"? How did they get themselves into debt?
ReplyDeleteI think the people should just pay them back and move to a different bank, because Icesave is not reliable. I would be furious if I had to reimburse the UK for my bank's decisions! I would immediately switch to another bank.
ReplyDeleteHow did Iceland fall into a debt?
ReplyDeleteHow did Iceland fall into debt?
ReplyDeleteI would not even bother paying back the UK because the bank is at fault. If anything, I should get reimbursed for all of my account information that was lost when the bank went under.
ReplyDeleteI'm confused the people didn't get money back, but they have to pay back the money the bank borrowed from the UK and Dutch? If that's true than I think it's bologna
ReplyDeleteThe Icelandic banks including Icesave owed (debt) around six times the country's total(GDP)Gross Domestic Product. When the world's credit markets dried up, they were left unable to refinance loans causing the bank collapse.
ReplyDeleteNo, the Icelanders' deposits and accounts were insured by Britain and the Netherlands as part of the "deal". They would loan money to them, but somehow they would want to be reimbursed.This relates to the earlier problems in our first systems of banking when the bank lost savers' money or ran out of money. Of course,theUk want their reimbursement. The people are upset because they would have to pay them back out of their funds for the banks mistakes.
ReplyDeleteI agree with your comment dejenae, but what happens if the government increases taxes or requires you to pay for the repayment plan. Depending on how they run their government will truly determine everything. I think it is important to pay them back before their economy go es into a further downfall or perhaps resulf into conflict between the two, which would cause more debt. Their best intrest would be to repay them, especially for the benefit of their economy.
ReplyDeleteIn your blog you stated that, "Many citizens were upset because they feel that although this plan helped them and their finances, that it was not their fault in the beginning that the Icesave Bank collapsed."And recently in class we discussed how other countries are modeling the National Bank after the U.S. How do you think this situation could have turned out different if Iceland had a system like the Federal Reserve.
ReplyDeleteI agree with many who have commented. Why are they in debt? Also i would just get my money back.
ReplyDelete