The article published the Banking Administration to answer report National Audit Office on how the sale of the government’s 22.5 percent stake in Íslandsbanki would have been successful in March. The National Audit Office found that there were several things, such as the alleged lack of experience and knowledge of the Banking Authority when it came to the route taken during the auction, that the prices could have been sold at a higher price and that information had been insufficient.
The Norwegian Banking Administration criticizes the National Audit Office for relying on limited data and says that if its answers had been taken into account, it would have changed more in the review process than it actually did. However, there are still „reflections and various ill-founded conclusions that cannot be seen to have a basis in the legal environment under which the Norwegian Banking Authority operates“.
Unprofessional words of the state auditor
Among the things that the Banking Administration criticizes are words made by Guðmundi Björgvin Helgason, the Auditor General Indicator. He is quoted as saying that the report would attract attention and publicity. These comments, the Bank Systil says, are „not only unprofessional and apt to undermine trust in him and the work that is currently at hand, but they also raise questions about whether there are such circumstances that his impartiality can rightly be called into question. .“ Banking Commissioners say that the report would have attracted little or no attention if the National Audit Office had taken the Banking Commissioner’s comments into account. It must be evaluated in light of Guðmundar’s words before the publication of the report.
Among the things that the National Audit Office criticized was that the decisions in the process had been subjective and that certain criteria had not been set. The Banking Administration says that it was necessary to assess various issues according to the tender. When discussing evaluative decisions, it is possible to reach a different conclusion than the original one if the relative importance of the points of view is changed. Therefore, there are limitations on „how far regulators, such as the National Audit Office, which does not have the expertise that the Norwegian Banking Authority does, can go when reviewing such decisions“. A long review of the decisions of the Banking Authority has been carried out, but no distinction has been made between issues that could be insignificant or significant.
Reject lack of knowledge and inexperience
In the answer of the Swedish Banking Authority, it is denied that the disclosure was insufficient. Certainly, it was avoided to specify in percentages how much the price obtained in the tender could be than the price on the market before the tender. It was done to protect the interests of the state treasury. The result shows that the injury rate will be as small as in this tender.
Another thing that the Banking Administration rejects is talk of a lack of knowledge and experience, as well as a lack of an overview of demand. On the contrary, Bankasysl’s managers are well educated and have a lot of experience. It was then regularly examined how the tender developed during it. An assessment of that determined the final pricing and the number of bonds that were sold.
Pricing was not based on subjective decisions, but on an assessment that takes place in the law and the goals that were set, says the Banking Administration. That valuation was not only based on the offers that were received, but also on knowledge of the position of leading investors regarding price and volume.
The Bank Administration rejects the National Audit Office’s calculations of offers and possible prices. She says that if a higher rate than 117 had been chosen, it would have been expected that foreign investors would not participate. If the exchange rate were 118, there would be a risk that long-term investors would hold their hands, while other risk-seekers would buy bonds. It would not be enough to think about what price would be obtained for the shares in the tender, but also what the price trend would be on the market in the future.
„Any kind of speculation about a price that could have been obtained if it had only been looked at serves a limited purpose in this context,“ says the Bank Administration of the National Audit Office’s calculations of a possible higher price.
