The Dutch company Avens BV and Landsbanki

Iceland’s debt just got worse.

Nothing new in that sense, but it hits the public very hard. And to think that the Dutch government actually tried to stop Iceland-s application to the EU today, but they did not succeed. The debt got higher, and the amount is 100 billion ISK.

This happened when Landsbanki in the Netherlands started the Dutch company Avens B.V. The financial exploits of that company were used by Landsbanki as collateral given to the Europien Central bank.

The reason for the starting of the company Avens B.V was that Landsbanki was suffering from shortage of Euros. Landsbanki started the company, bought Icelandic government debentures and issued another debenture in Euros by Avens B.V.  That bond was then given to the European Central bank.

This gave Landsbanki access to Euros via indirect purchase, and when the shortage was starting to hurt the bank, Sigurjón Árnason, the creator of Icesave came up with this brilliant plan on how to con the ECB and everyone else.

610 billion ISK is now owned by foreigners and one sixth of that is because of Avens. The bankruptcy estate of old Landsbanki is working successfully with the ECB trying to solve this. The ECB is not as as impatient as the Dutch and the British governments who are demanding, or should we say giving ultimatums and using political and economical threat to make the state of Iceland and thus the general taxpayer agree to a deal they themselves would never agree to.

This Avens adventure is perhaps one of the major factors in the continuing weakening of the Icelandic Krona, and the reason for the currency restrictions not working.

Aðalinngangur ASigurjón Árnason the ex Landsbanki CEO and the author of this Avens mess, and the infamous Icesave scam is now a lecturer at the Reykjavik University teaching first years BS students all about financial engineering. The University is trying to improve its image. More on that issue later….but what the hell are they thinking.

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