News from FSA Iceland

19.9.2008

Due to news of the insolvency of the American investment bank Lehman Brothers and the potential impact on financial systems across the world,  the Financial Supervisory Authority in Iceland (FME) would like to disclose the following information:

The FME has received information from the Icelandic commercial banks regarding their exposure to Lehman Brothers and connected parties. The sum of the exposure amounts to 182.6 Million Euro or 1.8% of the total capital base of the banks. The exposure is mostly in the form of bonds or the equivalent of bonds, senior debt, but not equity or subordinated bonds. It should be noted that the claims are partly on companies that have not filed for cessation of payments but are connected to Lehman Brothers. Part of the above mentioned claims are likely to be recovered.

These exposures are not considered to be of concern for the Icelandic financial system due to their low proportion of the capital base of the banks. This situation seems to be international as many large foreign banks have already informed the market of their exposure to Lehman Brothers.

For further information please contact Íris Björk Hreinsdóttir, iris@fme.is tel. + 354 525 2700

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