Icesave Issue Resolved

Yesterday evening the Icelandic parliament Althingi approved a legislation authorising a state guarantee for loans by the UK and the Netherlands to the Depositors’ and Investors’ Guarantee Fund to cover payment of mandatory minimum deposit guarantees to holders of savings accounts in branches of Landsbanki Íslands hf. in those countries.

Adoption of this legislation marks the end of a difficult and protracted international dispute with an agreement providing for the equitable sharing of the burden of the lost savings deposits between the states concerned. The dispute has impeded Iceland’s relations with other nations and the issue has been the subject of heated and widespread controversy among the general public. The adoption of the Act was a difficult step for the Althingi. Resolving the dispute in this manner is regarded as a prerequisite for continuing reconstruction efforts which have been underway since the economic shocks suffered by Iceland in the autumn of 2008 and which have already made very significant progress.

Ministry of Finance, December 31 2009