Personal loans linked to Iceland collapse

Fri, 16 Apr 2010

The highly anticipated Truth Report is beginning to expose the personal loans and underlying corruption which has led to the collapse of Iceland's economy .

The two thousand page document highlights a financially disastrous sequence of events whilst labeling key-players in the country's subsequent demise. Emphasis has so far been placed on the role of the three major banks, with one report listing Landsbanki, Glitnir and Kaupthing as the primary factors in the highly-publicised crisis.

One account identifies the banks as acting with great negligence in their award of loans to favoured customers or in some cases, to their own companies with little to no collateral . The impact of such personal loaning has been felt across the continent, with the UK reporting an estimated eight billion pound loss resulting from the island nation's bankruptcy .

The document has also raised questions regarding the pressure placed upon employees of such banks and financial establishments, and the process of granting the loans. Quoting ex-chief executive of Landsbanki - Sigurjon Arnason; one account states: "Resisting the requests from the owners of the banks would have equaled quitting from my position."

The staggering debt which led to the 2008 economic disaster, has highlighted the desperate need for banks, building societies and lenders to carefully evaluate both personal financial assistance and business loans prior to approval.
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