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Iceland hires advisors on removing capital controls
July 10, 2014 / 8:42 AM / 3 years ago

Iceland hires advisors on removing capital controls

REYKJAVIK, July 10 (Reuters) - Iceland has hired advisors to work on the removal of capital controls introduced after the country’s biggest banks collapsed in 2008, the finance and economic affairs ministry said late on Wednesday.

It said a priority would be to ensure economic stability during the unwinding process. The hiring of advisors marks the first significant step towards removing the controls by the centre-right government elected in 2013.

“Efforts are directed at finding an overall solution dealing with all aspects of the capital controls, including settlement of the estates in winding-up,” the ministry said.

Iceland’s biggest banks - Landsbanki, Glitnir and Kaupthing - collapsed under the weight of massive debts within weeks of each other in 2008, sending the economy and the country’s crown currency into a tailspin.

In May, outstanding creditors’ claims were estimated at 7.530 trillion crowns ($66 billion), dwarfing the country’s 2013 economic output of 1.786 trillion.

Legal office Cleary Gottlieb Steen & Hamilton LLP and consultants White Oak Advisory LLP would assist authorities in removing the controls. Investment bank JP Morgan would assist in connection with Iceland’s sovereign credit rating.

$1 = 114.0150 Icelandic Kronas Reporting by Robert Robertson via Stockholm newsroom, editing by John Stonestreet

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