Iceland government falls

[Magda Hassan]

The Protest Movement. Financial Fraud in Iceland

By Rady Ananda

URL of this article: www.globalresearch.ca/index.php?context=va&aid=21308

Global Research, October 5, 2010

As proceedings begin against Iceland’s former Prime Minister, Geir Haarde, for the banking crisis of 2008, at least two thousand Icelanders took to the streets in two days of protest this weekend. Iceland joins over a dozen other nations protesting economic measures taken out on the public while banks and large corporations receive bailouts. Class war is on, and it’s gone global.

Mass protests were also held in Greece, Portugal, Spain, Ireland, Germany, Italy, France, Slovenia, Lithuania, Latvia, Czech Republic, Cyprus, Serbia, Romania, Poland, and the U.S., according to reports from several sources. Folks around the world reject corrupt banking practices and bailouts, while social services are cut and tens of millions have been forced into joblessness and homelessness.

Dori Sigurdsson, an Icelandic blogger, reports that when Parliament returned from recess on October 1st, they were met by a loud, angry crowd who tossed eggs, bread, dairy products and keys at them. People slept outside the Parliament building the night before its return session. He’s posted videos and several images.

Dori notes, “because of the lack of help from the Goverment for the public, many are now losing their houses and cars.” In a nation of only 317,000, 12 percent (or 40,000) have lost or are about to lose their homes, he says. Icelanders condemn the injustice of large companies and their CEOs having had their debts forgiven by government, while theirs are not.

Three other officials were charged with “misconduct in the lead up to, during and following the banking crisis,” reports Ice News. Parliament voted to prosecute only Haarde for negligence, under a 100-year-old law that has never before been used.

Icelanders are also angry that only the former PM is being charged. One commenter on the Ice News article noted, “Is this not a total betrayal of the people?” And criminal, to reasonable minds.

Eggs hit Prime Minister, Jóhanna Sigurðardóttir, who rode into power as Iceland’s most beloved political leader with a 75% approval rating. She was installed in January 2009 after a coalition of Social Democrats and Left-Greens formed to replace the Independence Party-led coalition government, headed by Haarde, which was terminated. Should other nations terminate their corrupt governments?

The Guardian notes widespread protest across Europe “amid growing fury at austerity measures being imposed... Disruption in more than a dozen countries this week included a national strike in Spain and a cement truck driven into the Irish parliament’s gates.” Press TV also reported on protests planned in several nations last week. (See cement truck video here.)

Even in the US, thousands recently protested in Washington, D.C. for jobs instead of wars.ANSWER Coalition’s Brian Becker told reporters that the US spends a billion dollars every two days for its military invasions. That’s much lower than the trillion dollars a year that Robert Higgs of the Independent Institute calculates. We do know that Congress spends 58 percent of its discretionary budget on the military.

Many economists note that unemployment in the US is two to three times higher than what the Labor Dept. reports. In July, economists put the number at 28 percent, compared to the 9.5 percent rate reported by the feds. For September, the Christian Science Monitor showed unemployment at 16.7 percent, while the feds reported 9.6 percent.

In the US where 95% of the public rejected both Wall Street bailouts (under Bush and under Obama), we learned that banksters then rewarded themselves with million dollar bonuses. The boldness of their depravity is sure to have its rebound effect. Is it time to terminate this government, too?

The Guardian also reported that a “UN agency has warned of growing social unrest because of a long ‘labour market recession’ that could last until 2015.” 2015!

Thank goodness mortgage squatters are growing in number in the US. This is even before it was discovered that “foreclosure mills” fabricated documents to seize peoples’ homes. Some of those mills do not even hold legal title, Ellen Brown reports.

In Iceland, the Guardian noted, “Birgitta Jónsdóttir, one of three MPs to join the protesters, said: ‘There is a realisation that the IMF is going to wipe out our middle classes.’” That’s true of every nation sucked into the greed of banksters, the US included.

Protesters are out again right now, Monday night, Dori told me (6 pm Eastern, 10 pm Iceland time).



“The protest is still on, and it is peaceful – but with lots of noise that can be heard in the Parliament building.”

[Peter Lemkin]

Class war is on, and it’s gone global.......

Best news I've heard in a long time...may it be true..and continue, spread, intensify - and triumph!:elefant::flute::top: I know 'my class' has been on the loosing side for millenia - and makes up the overwhelming majority of Humans and all of the moral and hardworking ones.

[Magda Hassan]

Iceland Is No Ireland as State Free of Bank Debt, Grimsson Says

By Jonas Bergman and Omar R. Valdimarsson - Fri Nov 26 14:21:27 GMT 2010

Olafur R. Grimsson, president of Iceland. Photographer: Chris Ratcliffe/Bloomberg


Play Video

Nov. 26 (Bloomberg) -- Iceland's President Olafur R. Grimsson talks about the country's progress since receiving a $4.6 billion International Monetary Fund-led loan. He speaks with Mark Barton on Bloomberg Television's "On The Move." (Source: Bloomberg)



Iceland’s President Olafur R. Grimsson said his country is better off than Ireland thanks to the government’s decision to allow the banks to fail two years ago and because the krona could be devalued.
“The difference is that in Iceland we allowed the banks to fail,” Grimsson said in an interview with Bloomberg Television’s Mark Barton today. “These were private banks and we didn’t pump money into them in order to keep them going; the state did not shoulder the responsibility of the failed private banks.”
Ireland’s Prime Minister Brian Cowen said this week his government has discussed an 85 billion-euro ($112 billion) bailout with the European Union and International Monetary Fund after the country’s banks threatened to bring the euro member to the brink of bankruptcy. Iceland’s banks, which still owe creditors about $85 billion, were split to create domestic units needed to keep the financial system running, while foreign liabilities remained within the failed lenders.
As a consequence, “Iceland is faring much better than anybody expected,” Grimsson said. The Icelandic state’s liability on foreign depositor claims stemming from Icesave accounts at failed Landsbanki Islands hf should be put to a national referendum, he said.
“How far can we ask ordinary people -- farmers and fishermen and teachers and doctors and nurses -- to shoulder the responsibility of failed private banks,” said Grimsson. “That question, which has been at the core of the Icesave issue, will now be the burning issue in many European countries.”
Accept Losses
Iceland is relying on a $4.6 billion IMF-led loan to rebuild its economy. Grimsson said today the government may not need the entire amount.
Bondholders of European banks should be prepared to accept losses because voters are becoming increasingly unwilling and unable to fund bailouts, FXPro Financial Services Ltd. said in a Nov. 24 note.
“The taxpayer has no realistic prospect of being able to save their banks, such is the magnitude of their bad loans and their extraordinary dependence on central bank support,” wrote Michael Derks, chief strategist in London at foreign-exchange firm FXPro. “Both junior and senior bondholders in these insolvent banks need to suffer huge haircuts,” he said.
Forcing bond holders to “share the burden,” may help the euro region remain intact, Derks wrote.
Junk
Grimsson, who said Iceland’s talks to join the European Union are ongoing, in January this year blocked a $5.2 billion deal to cover British and Dutch depositor claims stemming from Icesave accounts. The move prompted Fitch Ratings to downgrade the island’s debt to “junk” as a normalization of international relations grew more remote. Iceland’s Finance Ministry on Nov. 16 said the country may now be weeks away from a “final resolution” to the Icesave dispute as it secures broad lawmaker backing for a new accord.
Kaupthing Bank hf, Landsbanki and Glitnir Bank hf failed within weeks of each other in October 2008 after they were unable to secure short-term funding. The banking crisis led to an 80 percent slump in the krona against the euro offshore, until the slump was stemmed by the introduction of capital controls at the end of 2008.
Kaupthing’s winding-up committee today said it finished dealing with claims lodged against it. The bank is dealing with a total of 28,167 claims filed by creditors across 119 countries totaling 7.32 trillion kronur ($63 billion), it said in a statement today.

http://www.bloomberg.com/news/2010-11-26...-says.html

[Jan Klimkowski]

That's more like it! :popcorn:

By Agence France-Presse, Updated: 1/14/2011

Iceland's Landsbanki chiefs arrested: prosecutor

Two former heads of collapsed Icelandic bank Landsbanki, including a former chief executive, have been arrested in connection with a market manipulation probe, the prosecutor on the case said Friday.

Sigurjon Arnason, the former head of the failed bank, and Ivar Gudjonsson, its former investment chief, were arrested Thursday and went before a judge Friday afternoon, special prosecutor Olafur Thor Hauksson told AFP.

"An investigation is still in process," he said, adding that if the two men were charged with market manipulation they would face a maximum prison sentence of six years.

The two men were remanded in custody, Arnason until January 25 and Gudjonsson until January 21, their lawyers told Icelandic media.

Three other ex-Landsbanki executives -- former chief corporate accountant Elin Sigfusdottir, former brokerage head Steinthor Gunnarsson, and former chief of securities Yngvi Orn Kristinnsson -- were also taken in for questioning by police on Thursday but were released.

Hauksson opened the investigation into Landsbanki's spectacular collapse last October.

The bank was one of Iceland's three main banks that all went belly-up in October 2008, and were taken over by the country's financial supervisory authority (FSA).

The FSA suspects that Landsbanki executives were involved in of market manipulation for nearly five years leading up to the crash.

Prosecutor Hauksson has been charged with the task of shedding light on possible fraudulent and illegal activities among the Icelandic bankers, nick-named "the witches" at the time their businesses were booming across Northern Europe.

In May 2010, a similar probe was launched into the dealings of the one-time largest bank Kaupthing, and several top executives were briefly taken into custody.

http://news.ph.msn.com/business/article....id=4579106

[David Guyatt]

Let's hope that common sense prevails and the Icelandic model of progress is adopted more widely - and that bank bondholders (who's wealth we the taxpayers are being bled to preserve) are forced to take a haircut.

But I'm not holding my breath....

[Peter Lemkin]

Interview: Birgitta Jonsdottir (Part One)
Monday, January 17, 2011 at 02:20PM

Last week I had the chance to interview Birgitta Jónsdóttir. She is an Icelandic parliamentarian, a member of the political anti-party called The Movement, and a former spokesperson for Wikileaks. She came to Toronto at the invitation of Samara and talked about her work for the Icelandic Modern Media Initiative (IMMI), a push to make Iceland a haven for freedom of information.

I intended to ask Birgitta about Wikileaks and other such topical issues, but we got to talking about more abstract questions. Here's part one:

Q: I was struck by your remark, at the beginning of your talk, when you mentioned that you were inspired to enter politics after reading Naomi Klein's book The Shock Doctrine. Was that because of her general thesis, or was it because you had specific worries that Iceland was going to get "shock-doctrined" in the wake of the economic crisis?

A. I had been on the forefront of fighting against the aluminum business in Iceland -- Alcoa and these other companies. Alcoa got to build a massive facility and was getting energy from the Iceland government four times cheaper than it was in Brazil. So I was concerned where Iceland was heading long before the economic collapse; I was concerned, and it was so annoying to be in the role of Cassandra.

I'd been reading books, including The Shock Doctrine, and I was very concerned when I heard the IMF was coming to Iceland. And I was concerned how the regulations were being chipped away when the banks were privatized…in 2007 we were ranked the most developed nation in the world. Where are we now? Third largest collapse in the world.

It draws this incredible parallel, even if not as extreme, with what happened in Argentina. We have a complicated situation in Iceland with political extremism: the neo-conism from before the collapse, and the new extremism saying the only solution is to join the EU. I am a member of the foreign affairs committee that has oversight over the application to the EU. I say we should tighten up our garden before trying to join another garden.

Because we are such a young democracy, and so few in number, when I look at former colonies in Africa, the parallels between their independence and ours is striking. There was a guy who contacted me many years ago: I git this email in 1997 or so, and at the time I had one of the only personal web pages from Iceland.

There's a strong belief in Iceland about the "hidden people" these mythical creatures who live in the hills amongst the rocks. I talked about them on my website, and this guy contacts me and asks if I believe in them, and I say yes, and he sends me this remarkable letter. And he says he has been appointed to be the "spear" to lobby for American corporations to enter Iceland.

I couldn't tell if this guy was real, but it turns out he had a high ranking authority in the California government, and he says that he had been visited by hidden persons, and they gave him a message saying he should stop doing what he was doing, and he was worried we would be exploited if American corporations discovered how vulnerable we are.

We are very vulnerable, we need help from the international community. Members of the environmental activist community were the first to see this in 2005, when we organized the first protests against the aluminum industry. That's the first time I was classified as an environmental terrorist; the worst thing we did was to padlock some machinery, and someone climbed up a crane.

But we pushed the barriers a bit. Which is basically what WikiLeaks does; they are an activist organization that pushes the barriers of the norm, and others feel empowered to go further, in sort of an evolutionary process.

Q: As a parliamentarian, you clearly feel you can make a difference by working within the system. Is that because you think Iceland is small enough and has a flexible enough political culture that working within the system can make a difference?

A: Well, I wanted do an experiment which is why we founded this party that was defined as neither left nor right. We made a checklist of things we needed to achieve. If it is foreseeable that we can't achieve these goals, we have to dissolve the party. We have max eight years. One of the things on the checklist is to sever the ties between then corporate and the political.

Q: Meaning, no corporate donations to political parties?

A: To have a severe limit to it, no large corporate donations. Some of them obviously try to go around it...

We, for example, would never accept large corporate donations. We are actually having difficulties raising money because we don't want to have any members nobody could be a member of The Movement. It makes it hard though, to organize volunteers. People wanted to pay to become members of the Movement, so we are looking into ways to solve that. So our idea is that if you want to be a member, you can also be a member of any other party as well. Because we don't want to define ourselves as a party.

I wasn't sure if it would make a difference, but the reason why we haven't become like the others, and it has been successful, is that we have two fundamentally different aspects. First, you cannot run for us if you have been a politician, because we want to build a bridge between power and the people.

Second: We are very horizontal (inspired by Horizontalism, a book from Argentina). So we rotate leadership roles, only because you have to have an appointed party group chairman. If we have to do leadership stuff we throw dice… the key is, we don't take it seriously, so we don't become like them. We take the pledge to be the annoying fly in the tent, and don't let anyone feel comfortable around us. We have a jar we have to pay money into if we sound like a politician.

The same with the media. The media hates us, because they love to have the leader of the party for interviews, and they are used to the same structure of power. … It is so critical to understand that there is nothing worthy to sacrifice for power. So as long as we can keep those things integrated…

I was trying to figure out, everything's still fucked up, what can the people ask for? They don't want another government because it's just the same parties. We have got little attention so people haven't understood what we are about yet. Many voted for us as part of a protest, because they don't trust the system.

What I realized is the system is the problem. We have this whole breed of people, most countries have been taken over by this breed called bureaucratic lawyers. They control everything; they work directly with lobbyists. Some of the law that has come up since the financial collapse was written by people from the banking sector. The ministries are filled with people who have got their job not because they are qualified, but because they have the right connections. Meanwhile you have qualified bureaucrats that never get any authority within the civil service.

I used to think I lived in a democracy, and I never thought that it would be so blatantly obvious to me that the system is basically controlled by lawyers. (laughs). And I thought, that's no good.

The problem is that systems tend to defend their mistakes as the US is doing right now with WikiLeaks. They look to every possible way to say they didn't make a mistake. And so we need to do like the Argentinians did, and protest the model of the system. I've talked to people from all over the world and there is the same level of distrust in the system, and that we don't have the tools to change it.

That's why I think it is important in Iceland, the development of national referendums. If people can call for a referendum, with passion, that they should have the right to have a referendum on issues that are important to the entire nation, then being an active citizen becomes more of the norm, and people will have to educate themselves about the issues.

[Peter Lemkin]

The Decade of Failure

Magnús Sveinn Helgason
The Reykjavík Grapevine
January 2011

While historymeaning: the past'does not change, historymeaning: the narration of past events'does in fact change. This is because we view history through the lens of the present. As events unfold, the meaning and significance of the past changes. And because our view of the past changes we constantly need to change our history textbooks.

So, it is pretty hard to predict how any event, let alone a whole decade, will be remembered. Because we do not know what the future holds, or what academic fads will reign among future historians, it is exceedingly difficult to say with any certainty how future historians will judge this first decade of the 21st century. Still, even if we lack the necessary hindsight of history, we can make some pretty good educated guesses.

A DECADE OF PROGRESS

The first decade of the 21st century in Iceland will most certainly be remembered as a decade of progress and achievement by those future historians who will emphasize social and cultural history. Important milestones were met in the history of human rights and equality, most recently with the 2010 law, which gives gay couples the right to marry. Another milestone was reached in 2009 when Jóhanna Sigurðardóttir became the first woman to serve as Prime Minister of Iceland and the first openly gay person to serve as a PM anywhere. An important step in world history.

Also, Iceland became a truly multicultural society as large numbers of foreigners, primarily Eastern Europeans, migrated to Iceland in search of work. And despite the occasional flaring up of xenophobia, Icelandic society welcomed these immigrants. By the end of the decade, Reykjavík authorities had even acknowledged that people from other cultures had the right to construct their own houses of worship, finally granting the nation's small Muslim community the right to build their own mosque.

The decade was also important in Icelandic cultural history. The arts flourished and Icelandic musicians enjoyed considerable success both in Europe and America.

All in all, Iceland in 2010 is far more cosmopolitan than it was in 2000.

A DECADE OF FAILURE

However important these developments are, I would argue that none of them is as important as the colossal, utter and inexcusable failure of the Icelandic economic miracle, which certainly is the defining event of the decade. The neoliberal experiment of creating prosperity by slashing taxes and regulations in order to turn Iceland into some sort of business friendly tax haven and global financial centre finally ended with the complete collapse of 2008.

The reason the public went along with this experiment in the first place was that Icelanders had been led to believe they lived in a country characterised by fair play, equality andabove allhonesty. Iceland was ranked as the least corrupt society in the world and Icelanders believed they were governed by honest politicians and that their businessmen were equally hardworking and honest.

The collapse and its aftermath showed Icelanders that this had been a mirage. The bankers, hailed as financial wunderkinder were actually looters. The politicians incompetent morons. Like the hapless Minister of Economic Affairs, caught like a deer in the headlights, without a clue as to what to do when they were faced with tough choices. Others, bursting with arrogance and delusion, like former Minister for Foreign Affairs Ingibjörg Sólrún Gísladóttir, declaring that those who dared protest the inaction and incompetence of politicians were "not the nation." Davíð Oddsson refusing to step down from the chair of the Central Bank. The managers of Kaupthing contemptuously declaring that they had absolutely nothing to apologise for.

A DECADE OF SQUANDERED TRUST

Trust is obviously important for all societies. But too much trust, as well as undeserved trust, is dangerous, and I would argue that one of the greatest weaknesses of Icelandic society at the beginning of the decade was excess trust: excess trust in politicians, business leaders and the market ideology. One of the main reasons for the protests that began in the fall of 2008 is the public's realisation that the elites, both political and economic, had betrayed the trust that they had enjoyed.

In fact, this appears to be part of a global pattern: everywhere, trust in politicians and business leaders has collapsed. Everywhere the reason is the same. The economic failure and financial collapse, caused by reckless financiers and complacent politicians, are not the primary reasonthe real reason is that people feel they were betrayed by their elites.

During the bubble, people tolerated growing income inequality because they were promised that the wealth would trickle down. It turned out the public was not allowed to share in the wealth, only the debts, because when the crash came, the public was forced to shoulder the cost of bailing out the speculators. To make matters worse, the left wing government, which promised to protect the homes and families, has been unable to come up with a comprehensive plan to help the public, and no concrete steps have been taken to increase social justice.

LESSONS LEARNED

This is not all bad, of course. People have learned the hard way that it is impossible to build permanent prosperity for an entire society on speculation, market manipulation and corporate raiding.

Icelanders have also learned important modesty. But at a steep price. Historically, Icelanders have been plagued by a certain mix of insecurity and selfimportance. During the boom years the insecurity was replaced by arrogance, creating a poisonous certainty and delusions of grandeur that fuelled the Icelandic financial bubble. As the bubble burst, people realised that Iceland was not the centre of the universe. To paraphrase the Borat-esque mangled Icelandic of the first lady: Iceland is certainly not "the most big country in the world" (stórasta land í heimi).

Finally, Icelanders have also learned that protest can be effective. It is not so long ago, that it was a commonly held belief that Icelanders were somehow genetically incapable of political protest. Groups like Saving Iceland were vilified and political activists were considered suspect. The financial collapse rekindled a spirit of political engagement that had all but died out during the bubble.

One can hope that this newfound political engagement and activism will lead to more democratic politics and more responsive politicians.

[Peter Lemkin]

Nine people went on trial in Iceland last week, charged with threatening the country's parliament a charge that has only been used once before and that carries a maximum life sentence. They were among 30 demonstrators who entered the parliament building via the visitors' door during a small protest in December 2008 at a time when thousands of Icelanders took to the streets to express their outrage at the government's part in the financial crisis.

Several precedents of vocal protests on the public balcony of parliament can be found, one of which a current MP, Össur Skarphéðinsson, organised and attended in 1976. No one has been charged for taking part in such action before not even the group who donned army camouflage and carried replica machine guns to protest against Iceland's decision to join the EEA in 1993.

The Reykjavik Nine are charged with a violation of a paragraph that falls under the article on terrorism in the Icelandic penal code, entitled "Attack on Parliament". In April 2005 the United Nations Human Rights Committee complained of too broad and obscure a definition of terrorism in the code. It might, the committee said, "encompass and consequently jeopardise legitimate activity in a democratic society, in particular participation in public demonstrations".

Now these concerns have been vindicated. If we assume the law on justice to be coherent, attacks on parliament should be interpreted as a more serious crime than terrorism: there is a minimum sentence for an attack on parliament, while there is none for terrorism. However, there is no sustainable evidence of intent of any kind of attack in the case against the Reykjavik Nine, nor of any violent behaviour or even threat of violence.

The evidence amounts to nothing more than the fact that on 8 December 2008, 30 people tried to go up to the public balcony of parliament to protest, and one of them managed to say a few words from it. From this group nine individuals were picked and charged at random.

During the trial at Reykjavik's district court last week, a group of Reykjavik Nine supporters transcribed the whole trial in a live blog. This has never been done before in Iceland, but it proved necessary, as the local media had mostly shunned the story until the trial began and relied on statements from parliament and the police authorities, which brought the action. The live blog enabled the public to read what was actually happening during the trial.

Reflecting the shock and dismay among the public at the lack of evidence and reliable testimony, the Icelandic prime minister, Jóhanna Sigurðardóttir, expressed her sadness at the proceedings on her Facebook profile during the trials. Possibly the most embarrassing moment of the trial was an admission by the parliamentary security manager, Guðlaugur Ágústsson. Ágústsson testified that on his own initiative he decided to copy only a fraction of the proceedings from CCTV cameras, knowing full well that the rest would soon be automatically wiped.

As the defence pointed out, the prosecution did not even manage to establish that all the accused had ever been inside the parliament building, let alone on the day in question. What the trial and a ruling will be issued within four weeks did establish was a deeper and more widespread understanding of the fact that the prosecution has no prima facie case. The crime the Reykjavik Nine are accused of was never committed, and there is no evidence to suggest anyone intended to commit it.


Jorunn Edda Helgadottir and Gudjon Idir are both active supporters of the Reykjavik Nine and helped to blog their trial.

[David Guyatt]

I feel sure that were a similar trial to take place here in the UK, the Judge would not allow a verbatim transcription and live blog.

[David Guyatt]

http://www.guardian.co.uk/business/2011/...urt-ruling

Luxembourg court releases Icelandic bank's documents to investigators

Kaupthing Luxembourg, its Icelandic parent and UK sister bank Kaupthing Singer & Friedlander collapsed in October 2008

Simon Bowers
guardian.co.uk, Sunday 30 January 2011 19.48 GMT



Icelandic prosecutors and the City watchdogs in Britain are scrutinising trading activities of Kaupthing Bank in the months before its demise. Photograph Bob Strong/Reuters
Criminal investigators looking into the failed Icelandic bank Kaupthing have won a rare victory in the secretive tax haven of Luxembourg where the supreme court has thrown out attempts to block the release of documents seized in a police raid almost a year ago.

The documents are likely to be critical to a complex international investigation into the activities of the bank and some of its largest clients in the months before its collapse. The investigation is focused on money flows between three financial centres: Reykjavik, London and Luxembourg.

Kaupthing Luxembourg went bust along with its Icelandic parent bank and UK sister bank Kaupthing Singer & Friedlander in October 2008. Luxembourg regulators split its assets into a "good bank" and a "bad bank", with the former acquired by property tycoon and leading Conservative party donor David Rowland less than a year later.

Rowland's bank and 19 other unidentified parties had appealed against requests for documents seized in police raids being released to state prosecutors in Iceland, who are examining cases of suspected market manipulation.

The decision by Luxembourg's supreme court to release all documents requested by Iceland comes after almost a year of legal battling against some of the toughest banking secrecy laws in the world.

Three of the four largest borrowers from Kaupthing Luxembourg prior to its failure were British businessmen: high street fashion entrepreneur Kevin Stanford, co-founder of Katsouris Fresh Foods Tony Yerolemou and property tycoon Robert Tchenguiz.

They accounted for about a quarter of the bank's exposures. At the same time Stanford, Yerolemou and Tchenguiz held stakes in Kaupthing of 1.9%, 0.85% and 1.5% respectively.

There have been no allegations of wrong-doing levelled at any of them.

Together with the Serious Fraud Office and Financial Services Authority in Britain, Icelandic state prosecutors are examining a wide range of suspect trading activities in the months before Kaupthing's demise, including trades in the complex and opaque credit derivatives markets.

Sigurdur Einarsson and Hreidar Már Sigurdsson, respectively Kaupthing executive chairman and chief executive, have already been made official suspects in Iceland, as has former Kaupthing Luxembourg chief executive Magnus Gudmundsson.

Among allegations being investigated are claims that certain credit derivative trades improperly used at least €500m of Kaupthing funds to manipulate perceptions of the bank's financial strength. Bank bosses, who deny acting improperly, hoped market interventions would restore crumbling confidence in Kaupthing's solvency. They claimed credit derivative prices were distorted by hedge funds set on destabilising the bank.

Yerolemou, at the time a non-executive director of Kaupthing, was among those caught up in the suspect trades. Stanford and his former wife Karen Millen have also found themselves embroiled in the trades. There is no suggestion of dishonesty on the part of Stanford, Millen or Yerolemou. They are not thought to have known trades, involving offshore companies under their ownership, might amount to market abuse on the part of Kaupthing.