The argument that has been made is that Iceland was required under EU "law" to backstop their deposit insurance fund. This author says no:
The Icelandic government protested that it was not responsible for deposits in private banks. It had fully complied with European law in setting up the Icelandic Insurance Fund for Depositors, financed by a levy on the banks. If the fund could not meet its obligations, it was a problem for those who, at their own risk and for a quick profit, had entrusted their money to Landsbanki.
That, incidentally, is exactly what the FDIC is.
Are you paying attention Americans and foreigners with deposits in American banks?
Those who said "no" replied that the British and Dutch bill was not an obligation created or accepted by Icelandic taxpayers. There was no explicit or implicit government guarantee of the liabilities of the Icelandic Insurance Fund for Depositors. The British and the Dutch governments reimbursed depositors on their own initiative and for their own purposes.
Uh huh. Vetoed by the President, and thus out to the people. They said "no."
It will be interesting to see if the threats of a lawsuit materialize. After all, it was threats by the Netherlands and Britain that led to the so-called "Treaty" (is it really a freely-entered into treaty if you shove a gun up someone's nose?) being sent to Parliament and then the President in the first place.
Mr. Gissurarson, a former member of the Board of Iceland's Central Bank, is professor of politics at the University of Iceland.
A man with actual knowledge. I think I'll believe him on what was and wasn't in the actual law too.
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