Bjarni “more, more”

Bjarni Armannsson and Hannes Smarason

Today, Bjarni Armannsson, former CEO of Glitnir spoke up for the first time since the collapse of the banking system he played a major role in building.

“I believe that those who lead the financial system are responsible. They should in a responsible way estimate how they are going to handle it. I do not leave myself out of that and refer there to my trust in the ISK, the construction of a payment system that went wild and the heard-like behavior that lead to a massive availability of loans.”

“In reality we did not tend to how we wanted our financial system to look in the beginning of the privatization. While turning from the idea of spread-out ownership, we were creating a system that was too risky. Meanwhile we did not maintain a strong enough supervisory system. We did not succeed in creating necessary traditions in the financial market, although we tried.”

“My belief and that of many others on the market being able to build its own set of rules and follow them was not built on solid enough ground.”

“Us who worked in the financial sector lacked understanding of our society and how to march to its beat”

“Politicians lacked understanding of the nuts and bolts of international Finance Institutions, including what framework they need to operate within”.

“On top of all this we have failed, in politics and business to manage the fluctuations that come with the ISK and it did not provide us with tools or frameworks that are needed to build long-term value.”

“It is proven that we do not have the discipline needed to control our own currency and use it as an economic steering-wheel. A part of ensuring the stability of the Icelandic economy in the long run must then be to explore the nation’s mind towards the EU with all its benefits and faults”.

“Invoking emergency laws and the run up to that point, indicates that the government was not prepared enough to face the situation. In ways we can feel sorry for those who were there because they were dealing with problems they did not know in any way or understood where it could lead them. On the other hand, the politicians of 2008 did not listen when they were warned. Their responsibility is great in the run up to those eventful days in October.”

“The Central Bank’s responsibility is great. Both as a lender to the banks in need and by maintaining a monetary policy that turned out to be on the road to hell like many had warned sternly about”.

“We who lead the different parts of the Icelandic financial sector created a foundation that was to weak to withstand the turmoil. We failed by overextending in growth in too short a period, depend on a currency that was too small and a monetary policy that would not work in international business long-term”.

“As important as it is to investigate fully what happened, it is no less important that each and every one of us looks inside ourselves and respond to what we find there”.

Funny to see Bjarni’s article because it came up in a conversation this weekend that he was predicting this summer that all of the banks would be nationalized in the autumn. Sure explains why he took the money and ran to Norway.

Tonight Bjarni was interviewed by Kastljos on the state broadcasting channel. He was asked about the high wages he and others were paid during the good times.

“The idea was to share the wealth between the owners of the capital and those who did the work”

If sharing was something on Bjarni’s mind then it would be interesting to take a look at how the wealth was shared inside the banks. In reality, a select few were given the whole cake and the rest gathered the crumbs.

Amazingly when asked about his massive golden parachute, he says that when he returned to Iceland after the crash he asked the new management of Glitnir to allow him to return the payments he had received since he left the bank, around 370 million ISK.

Who returns payments they have negotiated for themselves? Ones with guilty conscience?

Petur Blondal, former CEO of Kaupthing and now member of parliament has enjoyed telling the story of when he first noticed Bjarni as a university student on a field-trip in Asia. Reportedly Bjarni stuck out for having learned how to say “less, less” when dealing with store-owners.

Kastljós estimates that Bjarni has earned billions as Glitnir’s CEO. When he left the bank he was allowed to sell his shares in Glitnir at a higher price than other investors could bring in on the market which reportedly earned him 500 million ISK.

He must have read the chapter on “more, more” as well.

The host, Sigmar Gudmundsson asked an interesting question which all who believe in laissez faire economics should take notice of.

“How can you expect the market to work by itself when you are cheating it yourself? Aren’t you supposed to lead by example?”


1 Response to “Bjarni “more, more””

  1. 1 Kjartan January 6, 2009 at 9:55 pm

    One blogger put this figure he gave back into much needed perspective.
    According to his calculations, relative to his monthly income in the last few years, the money he gave back was equivalent to a janitor giving back a Yaris…

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