Belfast Telegraph

Home News World

Iceland's ex-PM guilty over crisis

Iceland's former prime minister Geir Haarde has been convicted of one charge related to the nation's banking crisis but cleared of four others.

The special court trying him said he will not face punishment, and the state will pay his expenses in defending the case.

Mr Haarde, who led the government from 2006 to 2009, was the first government leader anywhere to face criminal prosecution because of the global banking crisis.

The 15 members of the Landsdomur, a special court founded in 1905 to deal with criminal charges against Icelandic government ministers, returned a 500-page verdict, but only a brief summary was announced in public.

Haarde, who denied all charges, could have faced a sentence of up to two years in prison.

Iceland's banking sector ballooned to nine times the tiny nation's annual gross domestic product in a decade of boom, before collapsing under the weight of debt in October 2008. The country's three main banks collapsed in a single week.

Haarde was convicted of failing to take the initiative to insure "a comprehensive and professional analysis of the financial risk faced by the state because of the risk of financial crisis."

He was cleared of malfeasance, of neglecting to act to reduce the size of the banking system, of not making sure that national bank Landsbanki's Icesave interest accounts in Britain were transferred to a subsidiary, and of failing to produce better results from the government's 2006 report on financial stability and preparedness.

Haarde had said in evidence neither he nor financial regulators knew the real state of Icelandic banks' precarious finances until they collapsed.

Haarde, the former leader of the Independence Party, became a hated symbol of the bubble economy for Icelanders who lost their jobs and homes in the crash.

Daily News Headlines Newsletter

Today's news headlines, directly to your inbox.

Popular

From Belfast Telegraph