Private investment
June 22, 2009
A Red letter day for around 31,000 German bank customers of Icelandic bank Kaupthing after they learned that Germany's finance regulator had lifted a freeze on their deposits.
The Federal Financial Supervisory Authority, BaFin, said Monday it had received a letter from Iceland's economy minister, on behalf of the Reykjavik government, stating that the deposits in the German branch of Kaupthing, met with Icelandic and EU regulations.
Around 20,000 private investors of the partly nationalized bank will finally be able to withdraw their savings, totaling 308 million euros ($427 million), in the next few days from the bank with the remaining customers having to wait a few more weeks. The question of interest accumulated in the last eight months will be cleared up at a later stage.
On October 9 2008 the Bonn-based authority issued a stoppage of disposals and payments for the German branch of Kaupthing Bank. At the time BaFin said it wanted to secure the branch's still remaining assets.
Financial crisis
The former Icelandic government introduced emergency legislation with wideranging powers to battle the trouble at Icelandic financial sector. Iceland's then prime minister Geir H. Haarde had said that the unrest on global financial markets was posing a grave threat to Icelandic banking system as whole.
Faced with imminent financial ruin the Icelandic parent company Kaupthing blocked access to the online accounts of its branch in Germany after being placed under the control of Iceland’s financial supervisory authority.
One issue remains unresolved however. Kaupthing is still in a clinch with DZ Bank, which is withholding repayment of 55 million euros, which the Islanders "parked" with the German central bank at the height of the banking crisis. DZ Bank first wants to file a claim against the Icelandic bank before freeing up the deposits, which had been intended as reimbursement for Kaupthing depositors.
nrt/Reuters/AP/dpa
Editor: Nick Amies