A rapid-response financial investigation team with wide-ranging powers is being set up in Iceland to prevent another financial meltdown.
The SWAT-style unit will be sent in to offices without notice to forensically investigate banks and other financial institutions suspected of not sticking to the rules.
"We are trying to change the whole Icelandic banking culture - risk management was very poor and due diligence not observed," says Gunnar Andersen, director general of the FME, Iceland's financial supervisory authority.
In an interview with Complinet, the compliance solution provider, Andersen also slammed the international credit ratings agencies: "These ratings certainly influenced the thinking of regulators and investors. This was a factor that should not be taken lightly"
In October 2008, Iceland experienced the worst economic crash of any country in peacetime.
Glitnir, Landsbanki and Kaupthing were nationalised as Iceland's financial sector collapsed because of billions of dollars of bad debt.
Subsequently, the IMF agreed an emergency loan of $2.1bn to boost Iceland's ailing economy. In March 2009, the FME closed the final key independent Icelandic bank, Straumur Burdaras.
Landsbanki, Iceland's second largest bank was a major provider of savings products in the UK through Icesave, which held £4.5bn worth of investments in 300,000 accounts at the time of its collapse.
At the end of August 2009 it was reported Iceland had pledged to pay back over $5bn to the governments of the UK and the Netherlands following the collapse of Icesave.
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