News - 29.06.2023

Statement from the board of VR regarding the privatization of Íslandsbanki

The board of VR believes the ongoing privatization of Íslandsbanki to be an indictment of those involved in the process. The Icelandic government decided to sell its shares in Íslandsbanki against the public’s will and is ultimately responsible for the result. The blatant disregard for legal norms amongst Íslandsbanki executives is revealing and provides an insight into to the culture of the Icelandic financial sector, which unfortunately does not seem to have changed since the banking collapse of 2008. Statements from Íslandsbanki’s departing CEO and chairman of the board give little reason to expect any systemic change in the bank’s operations but rather try to denounce legitimate criticism as being unfair and overzealous.

It is now as important as ever to make significant changes to the banking system. Banks should serve society and support the development of households, individuals, and companies. The board of VR calls on the Icelandic government to abandon further sales of its shares in Íslandsbanki. Moreover, the board of VR calls on the government to leverage its ownership of Landsbanki to transform the bank into a financial institution which serves the public, offers fair loans, and shields its customers from the corruption of the financial sector and its unreasonable demands for endless profit. Landsbanki could in this way become something of a social bank or samfélagsbanki in Icelandic.

The transgressions made by Íslandsbanki during the sale of the government’s shares in the bank are completely unacceptable. Empty promises cannot rectify the situation and sacrificing the CEO without further structural changes will not suffice. The board of VR objects to the practice of allowing individuals who break the law to evade the consequences of their actions by simply issuing astronomical fines to the companies in questions, which consumers will ultimately pay for. Íslandsbanki’s board treats the issue as if it is unimportant by doing nothing except call a shareholder meeting a month after serious breaches of the law were uncovered. VR calls for the board of Íslandsbanki and the bank employees responsible for breaking the law to take responsibility for their actions and apologize to the nation. There is an obvious and pressing need for a structural and cultural shift within financial institutions like Íslandsbanki. The first step along that path is for the bank to address the current situation and do so seriously.

VR has conducted extensive levels of business with Íslandsbanki and its predecessors in the last years. If the bank and its board do not change their ways and shoulder responsibility, the board of VR will seriously consider cutting its business ties with Íslandsbanki completely.

The Board of VR
29 June 2023