Iceland sends ex-PM to court
The Icelandic parliament voted Tuesday to send former Prime Minister Geir Haarde to appear before a special court over his role in the collapse of the country’s financial system.The parliament, the Althingi, voted in favour of the motion by 33 votes to 30. The court will decide if Haarde should be charged with negligence.
It also voted against sending former finance minister Arni Mattiassen, former foreign minister Ingibjorg Solrun Gisladottir and former business minister Bjoergvin Sigurdsson to the court.
Haarde resigned from the job in January 2009 after being diagnosed with cancer. His conservative government was blamed for encouraging the liberalisation of the Icelandic banking sector and for not taking action earlier to deal with the financial crisis.
In October 2008, Iceland’s three biggest banks collapsed, leading to sharp devaluation of the Icelandic kronor, a downgrading in the country's credit rating and the toppling of the government.
After being deregulated in 2002, Iceland's banks rapidly expanded, offering high-interest Internet savings accounts to foreigners and foreign-currency mortgages to Icelanders.
They used short-term loans to do business. When Lehman Brothers collapsed in September 2008, the global debt markets froze and the banks could not access credit. But by this point, their liabilities were 12 times Iceland’s GDP.
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