Saga Capital posts
additional collateral
Tuesday 21. October 2008 18:00
Saga Capital Investment Bank has today responded to the margin call made yesterday by the Central Bank of Iceland and increased collateral in accordance to the Central Bank‘s rules. Saga
Capital has maintained good liquidity and low leverage and was thus able to meet the Central Bank‘s requirements.
Following the insolvency of Iceland's three commercial banks, Kaupthing banki, Landsbanki Islands and Glitnir banki, new banks were established to handle domestic commercial banking activities, and domestic deposit activity was transferred to these new banks. The Central Bank states in an announcement that consideration was also given to transferring the liabilities for securities pledged to the Central Bank to the new banks, so as to provide support for continued domestic banking activity.
Upon closer scrutiny the Financial Supervisory Authority decided that all debt instruments issued by the previous banks should remain in those banks for the time being, so as to guarantee transparency and non-discrimination among creditors. Because of this decision, the Central Bank informed Saga Capital Investment Bank and other domestic financial undertakings, that it would introduce a 50% haircut on unsecured securities issued by the three commercial banks that have been used as collateral in repo transactions with the Central Bank.
Following the insolvency of Iceland's three commercial banks, Kaupthing banki, Landsbanki Islands and Glitnir banki, new banks were established to handle domestic commercial banking activities, and domestic deposit activity was transferred to these new banks. The Central Bank states in an announcement that consideration was also given to transferring the liabilities for securities pledged to the Central Bank to the new banks, so as to provide support for continued domestic banking activity.
Upon closer scrutiny the Financial Supervisory Authority decided that all debt instruments issued by the previous banks should remain in those banks for the time being, so as to guarantee transparency and non-discrimination among creditors. Because of this decision, the Central Bank informed Saga Capital Investment Bank and other domestic financial undertakings, that it would introduce a 50% haircut on unsecured securities issued by the three commercial banks that have been used as collateral in repo transactions with the Central Bank.