Trial of former Iceland PM takes evidence from ex commerce minister

“The red line through all that year was that bankers feared that one little article in a British paper could have caused a bank to fall,” former Icelandic commerce minister Björgvin G. Sigurðsson told the Landsdómur court case against Geir H. Haarde this morning.

At the trial Björgvin answered questions from Andri Árnason, former Prime Minister Geir Haarde’s defence lawyer, about how much secrecy surrounded the work of the joint committee on financial stability. Björgvin said that there was as much confidentiality as it was possible to have; because there were clear signs of impending financial instability in the air, .

Björgvin had also said that a so-called fire sale of assets would have been a death blow to the banks and that all actions by the authorities, even conspicuous ones whereby the government actively helped reduce the size of the banks, would have led to their collapse.

Björgvin told the Alþingi prosecutor that he was on high alert at the time, and that several courses of action had been prepared. Asked what plans were in place to deal with the fall of the banks, he said that by far the biggest one was the implementation of the emergency laws which Alþingi imposed.

Answering widespread allegations that he was deliberately kept in the dark by Geir and Central Bank governor Davíð Oddsson, Björgin said he was not – and that he received just as much crucial information as any other minister.

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