Iceland, which alone in the entire developed world allowed its banking sector to collapse, and which, also alone, has benefited from a recovery that is truly organic courtesy of a devaluation of its currency and a global restructuring of its corporate balance sheet (read wipe outs for its banker class), continues to show the world that it is possible to have at least some semblance of justice in a world captured by fraud and criminal financial interests. After the CEO of failed bank Kaputhing was arrested back in May, today AFP reports that Iceland police has also detained the former CEO and several other executives of the other major Iceland failed bank: Landsbanki.
Two former heads of collapsed Icelandic bank Landsbanki, including a former chief executive, have been arrested in connection with a market manipulation probe, the prosecutor on the case said Friday.
Sigurjon Arnason, the former head of the failed bank, and Ivar Gudjonsson, its former investment chief, were arrested Thursday and went before a judge Friday afternoon, special prosecutor Olafur Thor Hauksson told AFP.
"An investigation is still in process," he said, adding that if the two men were charged with market manipulation they would face a maximum prison sentence of six years.
The two men were remanded in custody, Arnason until January 25 and Gudjonsson until January 21, their lawyers told Icelandic media.
Three other ex-Landsbanki executives -- former chief corporate accountant Elin Sigfusdottir, former brokerage head Steinthor Gunnarsson, and former chief of securities Yngvi Orn Kristinnsson -- were also taken in for questioning by police on Thursday but were released.
Hauksson opened the investigation into Landsbanki's spectacular collapse last October.
The bank was one of Iceland's three main banks that all went belly-up in October 2008, and were taken over by the country's financial supervisory authority (FSA).
The FSA suspects that Landsbanki executives were involved in of market manipulation for nearly five years leading up to the crash.
Prosecutor Hauksson has been charged with the task of shedding light on possible fraudulent and illegal activities among the Icelandic bankers, nick-named "the witches" at the time their businesses were booming across Northern Europe.
In May 2010, a similar probe was launched into the dealings of the one-time largest bank Kaupthing, and several top executives were briefly taken into custody.
The crimes these people are charged with are like child's play compared with what happened in the US during the great moderation. Which is precisely why no justice will ever be sought after our own former and current bank heads. At least no justice that can be dispensed in a court of law. That said, we still have to see real justice in Iceland: In May 2010, a similar probe was launched into the dealings of the one-time largest bank Kaupthing, and several top executives were briefly taken into custody. Briefly. Then released. It appears that even the country which attempts to appear a safe-haven from global financial corruption, is not immune from the effects of infinite fiat.