1. Alistair Darling and the Icelandic Bank Collapse

2. SIC Correctly Identified Risks Icelanders shocked and dismayed by collapse SIC, Special Investigation Commission, set up with immunity and exceptional powers Conclusion: Rapid credit expansion and excessive, obscured risk, created by three business groups True, but SIC neglected other source of systemic risk: discrepancy between field of operations and field of institutional insurance

3. The Baugur Bubble

4. Foreign Factors Crucial SIC identified vulnerabilities in Icelandic banking sector, systemic risks Neglected US and UK crucial decisions entering into vulnerable situation Darling’s revealing 2011 account of crisis

5. Darling on Icelandic Bankers P. 137: Bankers, or clients, made “handsome donations” to Conservative Party Wrong: None of them donor; however, the Rowland family, post-collapse owner of Kaupthing Luxembourg, confusion P. 152: Icelandic private jumbo jets in Luxembourg Wrong: Cargo planes belonging to Air Atlanta which bought them 1993, long before boom

6. Darling on Minister B. Sigurdsson P. 137–8: At 2 Sept. 2008 meeting, Minister and staff “did not realize just how bad a state Landsbanki was in” Was Darling aware of the bad state in which British banks found themselves? And was Landsbanki in a bad (risky) state because of British reluctance to move accounts? Recovery rate much higher than expected

7. Darling on Minister G.H. Haarde P. 137: Iceland “rapidly becoming insolvent” Wrong: Economy basically sound P. 137: Icelandic Minister preferring Russian loan Wrong: Credit lines and currency swap lines refused by traditional allies P. 147: “undertakings … sufficient money” Wrong: Icelandic authorities never made such undertakings

8. Account of Conversation P. 147: Prime Minister Haarde tried to negotiate down payment from KSF Haarde categorically denies this No basis for the allegation that KSF illegally transferred money to Kaupthing Book-keeping device: mutual loan agreements

9. Darling on Minister Mathiesen P. 152: Complained, not told the full story Wrong: Icelandic authorities did nothing to mislead their British counterparts P. 154: Other version than in contemporary interviews on conversation with Mathiesen UK Treasury Committee concluded that the account was wrong Mathiesen did neither accept or deny any obligations

10. Sources of Hostility Exceptional hostility towards Icelanders in book Ordered his pilot to avoid Icelandic airspace (perhaps a joke) Possible explanation: upstarts, newcomers, outsiders in British establishment Another explanation: Scottish angle, “arc of prosperity”

11. Upstarts from Nowhere?

12. Scottish Angle?

13. Conclusions Interest in, and hostility towards, Iceland by Darling and Brown extraordinary Government did not help British banks owned by Icelanders, but RBS and HBOS and Bradford and Bingley, etc., anti-terrorism law No currency swap deals and empty promises of cooperating with winding down system Predictions in 2005 and 2008 by a ret. CBI Governor and a Senior Person in finance