Iceland Wins Coverage Suit Over Bank's Foreign Deposits

Law360, New York (January 28, 2013, 2:26 PM EST) -- Iceland had no duty to repay depositors in the Netherlands and the U.K. when it took control of failed bank Landsbanki during the 2008 collapse of the country's financial sector, a European court ruled Monday.

The decision from the European Free Trade Association court vindicated Iceland's argument that while it had certain oversight obligations under the so-called Deposit Guarantee Directive, no provision of the agreement shifted the funding responsibilities from the private sector to the government.

“[European Economic Area] states have to introduce and officially recognize...
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