Iceland corruption investigator Eva Joly may quit in frustration
Iceland's anti-corruption expert, Eva Joly, investigating "suspicions of criminal actions" at Kaupthing, Glitnir and Landsbanki, has threatened to resign if the inquiry continues to be dogged by lack of political will.
Eva Joly, who advised on France's Elf Aquitaine scandal and the UK's BAE inquiry, said the scale of potential corruption at the Icelandic banks should be treated as one of the important financial investigations Europe has ever known.
However, she has raised concern about the potential conflict of interest represented by Iceland's state prosecutor, Valtyr Sigurdsson, whose son is the chief executive of Exista – the major shareholder in Kaupthing.
Ragna Árnadóttir, Iceland's justice minister, is now drafting a law to create another state prosecutor and Mr Sigurdsson has declared that he will not participate in the banking investigation.
Ms Joly also called on Iceland to appoint a much larger team of investigators, including three senior officials to look into allegations of corruption at each of the three failed banks.
In a television interview, she criticised a lack of political will in the Icelandic government to bring anyone who has committed economic crimes to justice.
Iceland's special investigation team is now working on more than 30 potential cases relating to the banking system, after Kaupthing, Glitnir and Landsbanki collapsed and were taken over by the Icelandic government last October.
The meltdown of its financial system and currency forced the UK Treasury to pick up a huge bill to compensate 300,000 savers with Landsbanki's Icesave. Last week, Iceland negotiated a deal to pay customers up to €22,000 (£18,700) back each.
The investigation will cover institutions that attracted billions of pounds in deposits from thousands of UK citizens, businesses, councils and charities at its centre.
Gylfi Magnusson, Iceland's business minister, later conceded there are similarities within the banking system and failed US energy company Enron.
Last month, Icelandic police raided 10 addresses and identified several suspects in connection with an inquiry into alleged market manipulation at Kaupthing.