Iceland wins Icesave case at European court
The European Free Trade Association (EFTA) court on Monday ruled that Iceland did not break European free trade laws on deposit guarantee schemes by refusing to compensate foreign depositors after Icesave’s owner, Lansbanki, collapsed in 2008.
The judgment obliterates any hopes the UK government had of pursuing Reykjavik for interest on the £2.35bn bail-out. It also raises grave questions about Europe’s cross-border banking arrangements, which allow overseas lenders to “passport” into a country without being subjected to local financial regulation.
In a key ruling that will set a precedent for future cross-border depositor guarantees, the EFTA court dismissed all three claims brought against Iceland and said the compensation rules did not mean the government had to fund the scheme.
“It is of considerable satisfaction that Iceland’s defence has won the day in the Icesave case. The EFTA Court ruling brings to a close an important stage in a long saga,” the Icelandic Foreign Ministry said.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9831785/Iceland-wins-Icesave-case-at-European-court.html