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Foreign Exchange

Getting what you pay for: Dodgy Icelandic banks

“I heard on the news that local authorities have started squealing that they may have lost [local council tax payers’] money due to lending to dodgy Icelandic banks”

I received a typically forthright e-mail from my old mucker Ron Smith-Galer, the market legend behind the now defunct revolutionary FX trading platform YoursMineShag.


“I heard on the news that local authorities have started squealing that they may have lost [local council tax payers’] money due to lending to dodgy Icelandic banks,” he says, adding: “Well they shouldn’t have been lending to them at all. We've been here before when Paul Nash was called in front of a Select Committee to explain why RP Martins were involved in local authorities lending to BCCI. It was mainly the Edinburgh Office and I think it f*cked someone like the Shetland Isles. It wasn’t Martins’ fault, of course, just local authorities’ treasurers enjoying brokers’ lunches and golf days – oh, and a chance to play trader.”


RP Martins was indeed implicated in such a scandal. Back in 1991, after BCCI collapsed, it was discovered that the Western Isles Council had deposited £23 million, making it the UK’s biggest loser in the BCCI crash. Of course, RP Martins was able to argue that it was only the middleman and that it offered no advice. It’s amazing that history appears to have repeated itself.



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