Iceland Takes Over Another Seafood Bank Active In Tuna Industryff

By Atuna

According to a press release issued on Monday, Iceland’s government announced it was taking control of the country’s second-biggest bank, Landsbanki, as Russia said it would lend it four billion Euros (5.4 billion US Dollars) to avoid financial turmoil.

An increasing portion of Landsbanki’s business originates outside of its home market in Iceland. In 2005, 35% of the Bank’s total lending was to borrowers outside of Iceland, up 27% from the previous year.

Landsbanki and its subsidiaries now operate in 17 countries, offering services to the seafood/fisheries industry in a variety of locations; they also hold investments and customers in the global tuna sector.

“The Icelandic Financial Supervisory Authority (IFSA) has, under powers granted by the Icelandic parliament, proceeded to take control of Landsbanki,” the government agency said in a statement.

The IFSA stressed that a complete guarantee for all domestic accounts announced by the government in Reykjavik on Monday would cover Landsbanki’s customers.

“Landsbanki’s domestic branches, call centers, cash machines and Internet operations will be open for business as usual,” it said.

“The action taken by the IFSA is a necessary first step in achieving the objectives of the Icelandic government and parliament to ensure the continued orderly operation of domestic banking and the safety of domestic deposits,” it added.

However, Icesave, the-online British arm of Iceland’s Landsbanki stopped its customers from withdrawing or depositing money on Tuesday, it announced. According to UK press reports, more than 300,000 British customers had £4 billion deposited in Icesave accounts, which offer higher rates of interest than British banks.

The IFSA announcement came a week after the Icelandic government said it would take control of 75 percent of the country’s third-largest bank, Glitnir, and as the country’s biggest bank Kaupthing said it had received a 500-million-Euro loan from the central bank.

And on Monday, Prime Minister Geir Haarde said his government was ready to take control of all the island’s banks to ward off the prospect of national bankruptcy.

“There is a very real danger ... that the Icelandic economy, in the worst case, could be sucked with the banks into the whirlpool and the result could be national bankruptcy,” Haarde said in an ominous televised speech.

A new law passed by parliament Monday enables the government to take control of financial institutions and shareholders’ meetings, fire board members, take over assets, merge institutions, block the movement of funds and force institutions to declare bankruptcy.

Iceland, long dependent on its fishing industry, is a nation of just 313,000 people whose banks have invested aggressively abroad in recent years, enabling it to experience ballooning prosperity and become one of the world’s wealthiest nations.