Three Lectures by Gissurarson in Stockholm, Berlin, Reykjavik

Posted on 08.04.15

Professor Hannes H. Gissurarson, RNH’s academic director, will give three lectures in April and attend two events in April and May 2015, in connection with two ongoing RNH-AECR projects. The first lecture is at a morning seminar at the Swedish think tank Ratio in Stockholm Thursday 9 April 2015 at 10 am, Sveavägen 59, 4th floor. Its title is “Sweden, Iceland and the 2008 Bank Collapse”. There, Professor Gissurarson mentions three little-known facts about Swedish-Icelandic relations: In the 14th Century, Iceland was for a while in a personal union with Sweden, neither with Norway or Denmark. In 1814, when Sweden acquired Norway by the Kiel Treaty, as a compensation for losing Finland, it did not want to include Iceland and the two other North Atlantic Norwegian dependencies, probably for strategic reasons. And the first leader of Iceland’s liberal-conservative party, the Independence Party, engineer Jon Thorlaksson, was much influenced by Swedish economist Gustav Cassel. Professor Gissurarson submits that during the bank collapse, Swedish authorities were more helpful than their counterparts in Norway and Finland (that assisted local businessmen in snatching Icelandic assets for a pittance), while unfortunately Sweden supported the United Kingdom against Iceland in the Icesave dispute. Professor Gissurarson will argue that it is time for Iceland to return to the arrangements of the Kiel Treaty whereby it was correctly identified by the Swedes as a North Atlantic rather than a continental country. This lecture forms a part of the joint RNH-AECR project on “Europe, Iceland and the Future of Capitalism”.

Milton and Rose Friedman with H.H. Gissurarson, Tokyo 1988.

The second lecture is at the annual conference of the European Students for Liberty om the Kinosaal at the Humboldt University in Berlin Friday 11 April 2015 at 10 am. Its title is “Three Modern Masters: Hayek, Popper and Friedman. Personal Recollections.” There, Professor Gissurarson recalls these three liberal thinkers, two of whom he knew quite well, Friedrich von Hayek and Milton Friedman, while Karl Popper he visited at his home in Penn, Buckinghamshire, spending a whole day with him in January 1985 discussing philosophy. Professor Gissurarson will quote some comments on both ideas and current affairs made to him by these three thinkers and not previously known or published. He will also compare them, Hayek being in his opinion the most profound thinker, Friedman being a very effective defender of liberty as well as a true academic, and Popper being very reasonable and moderate, trying to minimize identifiable evil instead of maximizing contestable ideals. Other speakers at the conference include English MEP Daniel Hannan, author of the recent book Inventing Freedom, French Professor Pierre Garello, Dr. Tom G. Palmer of the Cato Institute and Danish Flemming Rose, Editor of Jyllandsposten and internationally acknowledged as a champion of press freedom. Professor Gissurarson’s lecture forms a part of the joint RNH-AECR project on “Europe, Iceland and the Future of Capitalism”.

The third lecture will be at the Spring Conference of the Institute of Business Research at the University of Iceland Tuesday 21 April 2015, 13–14.30 in the University Centre, Haskolatorg, meeting room HT-101. It will be in Icelandic, and the title is: “Icelandic Assets Abroad after the Bank Collapse.” Professor Gissurarson will argue that Norwegian, Finnish, Danish and British authorities were responsible for heavy and unnecessary financial losses of the Icelandic banks during and after the 2008 collapse. The Norwegian and the Finnish authorities refused all liquidity assistance to Norwegian and Finnish banks owned by Icelanders and practically forced their fire sale to local businessmen. A similar thing happened in effect two years later in Denmark, with the FIH Bank, while the buyers also outwitted the Central Bank of Iceland which held the bank as a collateral. In October 2008, the British Labour government closed down the two British banks owned by Icelanders—Heritable Bank and KSF—at the same time as it helped all other British banks with a generous liquidity and recapitalisation programme. These two banks have now been wound up, and were seemingly sound and solvent at the time they were closed down. Professor Gissurarson estimates that the total financial loss in these cases in four countries amounts to about 270 billion Icelandic kronur, or about £1.4 billion. Some, or perhaps all, of this loss could have been used towards covering the enormous expenses of the Icelandic taxpayers incurred by the bank collapse. Professor Gissurarson’s lecture forms a part of the joint RNH-AECR project on “Europe, Iceland and the Future of Capitalism”.

Reykjavik 26 August 1991: PM David Oddsson, Icelandic FM Jon B. Hannibalsson, Lithuanian FM Algirdas Saudargas, Latvian FM Janis Jurkans and Estonian FM Lennart Meri (later Estonian President).

In 24–25 April 2015, Professor Gissurarson will attend the annual Lennart Meri conference on international affairs in Tallinn, Estonia. Professor Gissurarson was one of the guests at a dinner party which Prime Minister David Oddsson gave for Meri, then Estonian Foreign Minister, and the two other Baltic Foreign Ministers in Reykjavik 26 August 1991, after Iceland had become the first state to reaffirm its recognition of the three Baltic countries as sovereign states. Professor Gissurarson has also given lectures and written about Baltic-Icelandic relations. In 4–6 May, Professor Gissurarson will attend a conference on memory and conscience in Tallinn. His participation in the two Tallinn conferences forms a part of the joint RNH-AECR project on “Europe of the Victims: Remembering Communism”. Professor Gissurarson translated and edited the Black Book of Communism in 2009 and published a history of the Icelandic communist movement in 2011. In May 2015, Professor Gissurarson will also lecture at several conferences in Brazil organised by the Estudantes pela liberdade, the Brazilian Students for Liberty. His topics there will include a critique of recent demands for redistributing income by force coming from French economist Thomas Piketty.

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Loan from Russia, reckless businessmen, financial centres, etc.

Posted on 14.01.15

Part of the audience. Photo: Haraldur Gudjonsson.

Gudni Th. Johannesson, Associate Professor of history at the University of Iceland, and Hannes H. Gissurarson, Professor of Politics at the UI, both agreed that new evidence was to be found on the 2008 Icelandic bank collapse, at a meeting held by RNH and the Icelandic Association of Political Scientists Wednesday 14 January 2015. Johannesson has analysed documents from Wikileaks and obtained documents from the British Foreign and Commonwealth Office, FCO, by invoking the British Freedom of Information Act. In his paper, he said that the evidence available to him suggested that a loan from Russia to Iceland, discussed before the bank collapse, had been a real possibility. Also, a much-debated television interview with the Governor of the Central Bank of Iceland, David Oddsson, did not bring about the use of British anti-terrorism law against Iceland, as was sometimes alleged. The documents from the FCO however had limited value because so much was redacted out of them. They nevertheless showed that the British Treasury had, in the autumn of 2008, directed negotiations with the United Kingdom, and not the FCO. Johannesson said that he doubted the “insurrection theory” about Iceland in the financial crisis maintained by Styrmir Gunnarsson and Hannes H. Gissurarson. Johannesson also discussed, in general terms, the historical significance of documents and the demand for impartiality in history. He published a paper in the historical journal Saga on these issues in the autumn of 2014.

Gissurarson giving his talk. Photo: Haraldur Gudjonsson.

Professor Gissurarson pointed out that 7 January 2015, minutes of the Court of the Bank of England from 2007–9 were published online. At a meeting on 15 October 2008, the Court expressed its view that attempts by individual nations to become financial centres should be strongly discouraged. Iceland was taken as a specific example. Gissurarson agreed with Johannesson that a loan from Russia had been a real possibility. He quoted Tryggvi Thor Herbertsson, then the economic adviser to the Prime Minister, who had received a phone call from the Russian Ambassador in the morning of 7 October 2008, immediately after Governor Oddsson had received a call from the Ambassador. The message to both was unequivocal: Russia had decided to issue a loan to Iceland. The Russians had however second thoughts later in the day when somebody informed them that the International Monetary Fund, IMF, was trying to have a programme for Iceland being accepted. After this, Iceland had been entrapped by the IMF which turned itself into a bounty collector for the British, refusing to negotiate until Iceland assumed responsibility for the failed banks’ obligations. If Iceland had, in the midst of the financial crisis, been able to make a currency swap deal or establish a credit line of $5–10 billion, either with Russia or the US, then there would not have been a run on the banks and a massive cancellation of credit lines to them: then, the government could have taken the “Swedish option” which was to keep operating the banks, dividing them up between a “good” part and a “bad” part, with bank shareholders losing most or all of their equity. Then a foreseeable downturn would not have become a total collapse.

Dr. Eirikur Bergmann commented on the two papers. He criticized Professor Gissurarson’s distinction between “good” and “bad” capitalists. He also said that it remained to be explained why the British government had been so brutal towards an old ally and friend. It seemed that it thought that it had been promised a full guarantee of the banks’ obligations in the UK, and that this promise had been broken. Nobody knew however who would, or could, have given such a promise. The meeting which was held at the University of Iceland was very well-attended. A lively discussion followed the papers by Johannesson and Gissurarson and the comment by Bergmann. Dr. Tryggvi Thor Herbertsson confirmed the account given by Gissurarson on the discussion of the Russian loan. The meeting formed a part of the joint project by RNH and AECR, Alliance of European Conservatives and Reformists, on “Europe, Iceland and the Future of Capitalism”. Vidskiptabladid, the Icelandic business weekly, recorded the whole meeting and published it on its website, as well as a series of photographs of it. Both the Icelandic Broadcasting Service and Station Two interviewed Johannesson and Gissurarson for the evening television news, and also the radio programme “The Mirror” (Spegillinn).

Here are the interviews on Station Two:

Here is the account of the meeting in Morgunbladid:

Here are Professor Gissurarson’s slides:

HHG.Reykjavik.14.01.2015

Here is the account in Vidskiptabladid:

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Bank Collapse — New Evidence: Wednesday 14 Jan. 12–13

Posted on 09.01.15

Dr. Gudni Th. Johannesson, Associate Professor of History, and Dr. Hannes H. Gissurarson, Professor of Politics, will give lectures at a meeting held by RNH and the Icelandic Association of Political Scientists Wednesday 14 January 2015, at Haskolatorg, Room HT-101, at 12 to 13. They will discuss new evidence on the 2008 bank collapse in Iceland. Professor Johannesson has studied and analysed secret documents made available by the Wikileaks initiative, especially about the activities of the US Embassy in Reykjavik prior to and during the bank collapse. He has also recently received confidential documents from the British Foreign and Commonwealth Office by invoking the Freedom of Information Act. In a paper in the autumn edition of the Icelandic history journal Saga he argues that this new evidence may throw more light on aspects of the bank collapse, for example the attempt, before the collapse, to obtain a loan from Russia and a much-debated television interview with Central Bank of Iceland Governor David Oddsson Tuesday 7 October 2008.

Professor Gissurarson has led a research project at the Institute of Social Research at the University of Iceland, with the support of the Icelandic Ministry of Finance, on foreign factors in the Icelandic bank collapse, not least the refusal by central banks in the US, UK and Europe to make currency swap deals with the Central Bank of Iceland, the closure of the British banks owned by Icelanders in the midst of the financial crisis, and the use by the British Labour government of the Anti-Terrorism Law against Iceland. As a part of this project, Professor Gissurarson has interviewed many leading politicans and bankers, including Alistair Darling, the UK Chancellor of the Exchequer during the crisis. Dr. Eirikur Bergmann, the author of a recent book in English on the Icelandic bank collapse, will comment on the two lectures, after which there will be a discussion with participation from the floor.

The meeting will be moderated by Eva Heida Onnudottir, President of the Icelandic Association of Political Scientists. The meeting forms a part of the joint project by RNH and AECR, the Alliance of European Conservatives and Reformists, on “Europe, Iceland and the future of Capitalism”. Admission is free and all are welcome.

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Gissurarson: the UK left Iceland Out in the Cold

Posted on 15.12.14

Professor Gissurarson giving his lecture. Photo: Andres Magnusson

The Icelandic 2008 bank collapse was self-inflicted in the sense that a precarious situation had been created by the very rapid growth of the three main Icelandic banks. But glass does not break because it is breakable, and a precarious situation does not become a collapse, unless something is done to it. This was what Dr. Hannes H. Gissurarson, Professor of Politics at the University of Iceland and RNH Academic Director, said in a well-attended lecture at the Institute of Economic Affairs, IEA, in London 27 November 2014. According to Professor Gissurarson, three decisions had entered into this precarious situation, transforming it from a recession in Iceland into a total collapse of the banking sector: First, the US Fed had refused to make the same dollar swap deals with the Central Bank of Iceland, CBI, as it had done with the central banks of the Nordic countries and even of Switzerland. Second, in the second week of October 2008 the British Labour government had refused to provide the same liquidity for the two British banks owned by Icelanders as it did for all other British banks. Third, by invoking an anti-terrorism law against Iceland (briefly against the CBI and the Icelandic Financial Supervisory Authority, and for a longer time against the Icelandic bank Landsbanki), the British Labour government had made all rescue attempts impossible. This sudden strike against an old friend, a nation without even a military, a fellow NATO member, recently standing behind the UK and the US in the Iraq War, was almost incomprehensible.

Professor Gissurarson rejected the thesis that the Icelandic banking sector had been too big. In fact, it was about as big relatively as the Swiss banking sector, whereas the Scottish banking sector was somewhat bigger, relative to Scotland itself. Why did the Swiss bank UBS and the Scottish bank RBS then not fail like the Icelandic banks? Because they were rescued, not least by dollar swap deals, provided by the US Fed, and in the case of RBS also by taxpayers’ money from England and Wales.

Alistair Darling

Professor Gissurarson agreed with the Icelandic Special Investigation Commission, SIC, on the bank collapse that there had been a hidden systemic risk in the Icelandic banking sector. This risk was mostly created by the Baugur Group as could be seen from the 2010 SIC report. The Icelandic banks had used the good reputation Iceland had earned in 1991–2004, when sound economic policies were pursued, to obtain foreign credit which they had then passed on to Baugur Group and to some other business groups. Some investments of Baugur Group had been sound, while others had been unwise: For example, the head of Baugur Group, Jon Asgeir Johannesson, had spent tens or even hundreds of millions of dollars on a private yacht, Heesen 4400, a private jet, Dassault Falcon-2000, luxury ski huts in Courchevel in France and an immense penthouse on Gramercy Park in Manhattan. By their extravagance and aggressive behaviour, in 2004–8 Johannesson and some of his business partners had destroyed, or at least blackened, Iceland’s good reputation and thus made it more difficult for the Icelandic authorities  to obtain assistance when subsequently needed. However, the British Labour government had also been outright hostile to Iceland, as could be seen from the book by the former Chancellor of the Exchequer, Alistair Darling, Back from the Brink, published in 2011. It was hard to explain this hostility, but possibly Darling and former Prime Minister Gordon Brown, both coming from Scotland, had wanted to demonstrate to the Scots that independence was a risky endeavour.

After the lecture, Professor Gissurarson answered questions. A member of the audience expressed surprise at the 2013 EFTA Court judgement in the Icesave dispute between the UK and Iceland because surely the Icelandic government had discriminated between Icelandic and foreign depositors. Professor Gissurarson replied that this was indeed a common misunderstanding, shared by British ministers and even judges. By the Emergency Act of 6 October 2008, all deposits in Icelandic banks had been made priority claims, including deposits held by UK residents. However, at the same time, Icelandic government ministers had announced that they would guarantee all domestic deposits. This announcement had not had any legal significance or force, and it was in fact similar to public announcements made all over Europe at that time in order to prevent panic and a run on banks. Professor Gissurarson’s lecture formed a part of the joint project by RNH and AECR, the Alliance of European Conservatives and Reformists, on “Europe, Iceland and the Future of Capitalism”.

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Smith: Money Improves and Extends Human Life

Posted on 13.12.14

Professor Tara Smith from the University of Texas in Austin gave a lecture at the University of Iceland, sponsored by RNH, Monday 24 November 2014, on the moral message in the works of Russian-American novelist and philosopher Ayn Rand. The most influential female philosopher of all times, Rand expressed her political ideas in her novels which have sold in thirty million copies worldwide. AB Publishing has recently brought out three of her novels in Icelandic translations: The Fountainhead (Uppsprettan, 2011), Atlas Shrugged (Undirstadan, 2012) and We the Living (Kira Argunova, 2013). In her lecture, Smith discussed in particular two passages on money in Atlas Shrugged. Francisco d’Anconia gives a speech against the common view that money is the root of all evil. He argues that money is a medium of exchange which enables individuals to satisfy their different needs by free trade, without commands from above. Instead of stealing the goods which people desire, they pay for them with their money. In another passage in Atlas Shrugged it is explained that money also extends life indirectly. It buys time, enables people to satisfy more needs than before. In an order based on money and exchange people have to work ever fewer hours to satisfy their basic needs and thus can use more time for what they really desire, want dream about or aspire to, materially and spiritually. The lecture was well-attended. After it, Professor Smith answered questions from the audience, and then RNH held a reception on the University premises. Professor Smith’s lecture formed a part of the joint project by RNH and AECR on “Europe, Iceland and the Future of Capitalism”.

Here is a lecture which Professor Smith gave on Ayn Rand in Stockholm in 2014:

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Crisis in UK and Iceland: London 27 November 18.30

Posted on 26.11.14

Dr. Hannes H. Gissurarson, Professor of Politics at the University of Iceland and RNH Academic Director, gives a lecture at the London think tank the Institute of Economic Affairs at 2 Lord North Street in Westminster (close to Westminster Palace) Thursday 27 November at 18.30. The lecture is titled “Why was Iceland left out in the cold? and kept there?” According to an IEA announcement, Professor Gissurarson will discuss

  • the liberal economic reforms in Iceland in 1991–2004;
  • the development from market capitalism to crony capitalism in 2004–8;
  • the relations between Iceland and the UK before the Icelandic bank collapse on 7 October 2008;
  • the closure same day by British authorities of the London branch of Landsbanki, and the two Icelandic-owned British banks, Heritable and KSF, Kaupthing, Singer & Friedlander;
  • the use by the UK government on the next day, 8 October 2008, of the anti-terrorism law against Landsbanki, the Central Bank of Iceland and the Icelandic Financial Authority and its consequences for the Icelandic economy;
  • and the subsequent dispute in 2008–13 between the UK and Iceland on the liability for the Landsbanki Icesave accounts, leading to three failed deals and two national referenda.

Admission is free and all are welcome, with a reception following the lecture and discussion. The IEA is one of the most influential think tanks in the UK, and indeed in the whole world. Its founders, the businessman Sir Anthony Fisher and economist Lord Harris of High Cross, both visited Iceland in the 1980s and gave talks. In 2013, Professor Philip Booth, the IEA Academic Director, came to Iceland and read a paper on the real causes of the financial crisis. Professor Gissurarson’s lecture forms a part of the joint project of RNH and AECR, Alliance of European Conservatives and Reformists, on “Europe, Iceland and the Future of Capitalism”.

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