Who Foots The Bill?

As the first trading week of the year closes, it would be easy enough to celebrate the early year optimism which has swept through the markets and will no doubt extend the M&A recovery. ISM and PMIs provided positive surprises globally, resulting in equity markets starting the year on a firm footing. Yet this optimism cannot allow us to ignore a negative hangover from the crisis: the decision by the Icelandic President to veto a government bill to pay US$5.7bn to the British and Dutch governments, following the collapse of Icelandic savings account Icesave. Dutch and UK savers had not been able to resist its high returns and when Icesave collapsed in October 2008, the UK and Dutch governments bailed out citizens with Icesave exposure, as the failure of their own regulatory systems was partly to blame.

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