Iceland to submit report on failed banks this week

STOCKHOLM, April 15 (Reuters) - Iceland’s government said on Wednesday an evaluation of the assets and liabilities of its failed banks would be submitted to its market authority and main creditors within two days, with a deal expected by late May.

Negotiations on the division of the assets will begin as soon as possible, a government spokesman told Reuters, with an agreement expected by May 18.

Iceland’s main commercial banks -- Kaupthing, Landsbanki and Glitnir -- failed last year, leaving creditors mainly across Europe, owed billions of dollars.

Creditors include a wide-range of individual depositors, bondholders and financial institutions.

The banks’ outstanding debts included more than $62 billion in foreign currency obligations when the government seized control of them in October last year.

The Icelandic government wants to secure an agreement with creditors to help the country return to the international capital markets and relax the capital controls currently in place.

Deloitte & Touche, which provided the audit for Iceland’s finance ministry, was to deliver the report to the country’s Financial Supervisory Authority, a finance ministry spokeswoman said. The financial watchdog would then distribute the document to key creditors.

Kristjan Kristjansson, press secretary for the Prime Minister’s Office, said negotiations between the government, which is representing the “new banks”, and the key creditors could begin as early as Wednesday.

“The two parties will negotiate on how to split up the assets. Those negotiations could start later today,” he said.