The opening balance sheets of the three new banks

12.11.2008

The FME would like to clarify that when it was decided, on the basis of Act No. 125/2008 dealing with unusual financial market circumstances, that three new banks founded by the State Treasury should take over a portion of the assets, rights and obligations of Landsbanki Íslands hf., Glitnir Bank hf. and Kaupthing Bank hf., particularly those related to the domestic operations of the banks, the board of each new bank was officially given a temporary opening balance sheet accompanied by a statement explaining how assets and liabilities on the balance sheets of the old bank had been divided. In this respect, all decisions of the FME have been published as stipulated by law.

The operations of the three new banks have commenced on the basis on these new balance sheets. Their boards are now responsible for the banks and for information on their finances and operations, as is the case for other financial undertakings.

The above-mentioned opening balance sheets of the three banks were set up by international accounting firms. Inevitably, this work had to be expedited. Following the initial work it has been necessary to make some changes to the balance sheets to achieve consistency in the division of assets and liabilities between the old and new banks and in order to adapt them to their daily operations for the good of the public and the economy. Due to the great turmoil in the economy it is unusually difficult to appraise the value of assets and liabilities at this time.

In accordance with the decisions of the FME on the division of assets and liabilities of the three banks, recognized international appraisers have now been appointed to appraise the real value of assets and liabilities of the three banks. Upon the completion of this revaluation, the final opening balance sheets of the three banks will be published.

The opening balance sheets of the three new banks, which apply temporarily, will be published in the next days.

For further information please contact Íris Björk Hreinsdóttir, iris@fme.is, tel: 525-2700 and Úrsúla Ingvarsdóttir, ursula@fme.is, tel: 525-700.

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