Restructuring of the Icelandic banking sector
Currently meetings are ongoing between the creditors of the old banks and the Resolution Committees. These meetings include i.a. briefings on the process of reorganization of the banking system, the division of the banks and the valuation of their assets. The operation of rebuilding the Icelandic banking system after the collapse in early October encompasses five parallel work processes:
- A valuation of the net assets of the new banks at the point of their establishment. The methods used in this valuation aim at fair value measurement based on orderly transactions between market participants on the measurement date, not the price that would be achieved in a forced liquidation or distress sale.
- A valuation on a similar basis of the net assets of the old banks to serve as a frame of reference for the Resolution Committees in their work with the creditors.
- The preparation of IFRS compliant primary financial statements for each of the new banks at the beginning of their operations.
- A process that will lead to the creation of financial instruments linking the new and old banks which will be supported by the valuation process and the opening financial statements of the new banks.
- A review of the bank regulatory framework and supervisory practices to strengthen safeguards against potential new crises.
Further information can be found here.
For further information for the media please contact Íris Björk Hreinsdóttir, iris@fme.is or Úrsúla Ingvarsdóttir, ursula@fme.is tel. +354 525 27 00