New financial institutions assume deposits and assets of Byr and Keflavik Savings Bank
New financial institutions assume deposits and assets of Byr and Keflavik Savings Bank
Highlights:
- New financial institutions controlled by the state assume deposits and assets of Byr and Keflavik Savings Bank
- All deposits are fully covered as previously declared by the government
- All services by both financial institutions continue uninterrupted
Authorities have been monitoring closely discussions between Byr and Keflavik Savings Bank and their creditors, to ensure that debt restructuring of the savings bank is concluded on a sound basis. The Minister of Finance previously announced that the government would be ready to provide a certain amount of equity provided that an agreement could be reached about debt restructuring based on a detailed and transparent valuation of assets and the government's risk exposure thus minimized.
Several creditors of Byr and Keflavik Savings Bank have now rejected a proposal for debt restructuring. Following a request by the boards of Byr and Keflavik Savings Bank the Financial Services Authority (FME) has taken control of the savings banks.
In accordance with established procedure FME has transferred deposits and assets of the two savings banks to newly established financial institutions which will be fully owned and controlled by the state. The new institutions thus assume all deposits and assets to match these debts.
Depositors in Byr and Keflavik Savings Bank will as before have full access to deposits in their accounts and all clients of the savings banks will enjoy the same services as before. The savings banks and all branches will open on Friday April 23rd following the Thursday April 22nd bank holiday providing regular services. Normal access to ATMs, internet banking, credit- and debit cards as well as payment systems will remain intact. Reference is made to previous statements by the Government of Iceland which has declared that deposits in domestic commercial and savings banks and their branches in Iceland are fully covered.
The restructuring of a number of savings banks has been ongoing. The basis for agreements for the restructuring of the debt of a number of savings banks are in place and these transactions should be concluded soon. At the conclusion of this process these savings banks should therefore operate on a sound financial foundation.