Kaupthing Singer & Friedlander Ltd

Monday 25th June 2012 Written Statements

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

Kaupthing Singer & Friedlander Ltd (KSF) was the UK subsidiary of the Icelandic bank Kaupthing bank hf. On 8 October 2008, the Financial Services Authority (FSA) decided that KSF was in breach of its threshold conditions under the Financial Services and Markets Act 2000 (FSMA) and that it should be prohibited from accepting any new deposits.

Treasury officials have prepared a note on the events around the failure of KSF, focusing on: the chronology of events ahead of the failure of Icelandic banks in October 2008; why the FSA came to the decision that KSF had breached its threshold conditions; the discrepancies in reporting on whether Iceland would honour its obligations to UK depositors; and whether the actions of UK authorities triggered the administration of KSF Isle of Man (KSF IoM).

The note clarifies that, while the Treasury used asset-freezing powers in relation to Landsbanki Islands hf, another Icelandic bank, the use of these powers by the Treasury did not have any direct impact on the failure of KSF, KSF IoM or Kaupthing Bank hf.

I have placed copies of the document in the Libraries of both Houses.