|More than 100 Companies Owned by Icelandic Banks|
|Written by Iceland Review|
|Wednesday, 09 November 2011 19:00|
A total of 137 companies that have unrelated operations are currently in the ownership of the Icelandic banks, as stated in the response of the Financial Supervisory Authority (FME) to an enquiry from the Icelandic Federation of Trade (FA) to that regard.
From Reykjavík. Copyright: Icelandic Photo Agency.
According to law, banks are only permitted to own companies for 12 months without applying for exemption from the FME, Fréttabladid reports.
However, there are examples of banks, or their subsidiaries, having been in ownership of companies for more that 30 months.
In the FME’s response it is stated that an exemption has been applied for in the cases of half the companies currently in the banks’ ownership, a total of 68. All 68 cases were approved.
In June 2010, the timeframe of 12 months was added to the law on banks—earlier no timeframe was stated—and now the FME actively monitors the banks’ ownership of companies.
Almar Gudmundsson, managing director of FA, said it is important that surveillance authorities build up credibility in compliance with the law.
“That is not at hand if tens of companies have been owned by the banks for a long time. Formally, many of them have been owned by a bank for more than a year and informally much longer,” he stated.
“The message is that the bank is given the benefit of a doubt, not the consumer or the market of competition,” Gudmundsson concluded.
The issue has been a topic of discussion lately. On October 25, 12 companies ran an advertisement expressing their discontent with the operations of Penninn, which carries books and office equipment and with which they are in competition.
They stated that Arion Bank violates competition regulations by keeping the company going with continuous financing in spite of its extensive losses, ruv.is reports.
Fréttabladid reported the same day that 14 stores and furniture producers are planning to sue Arion Bank because of Penninn’s operations on the grounds that the bank is guilty of illegal trade methods.
|Last Updated on Thursday, 10 November 2011 16:01|