Tuesday, October 14, 2008

Rule 157: Nordic Style (Empty Supermarkets in Iceland)

We've posted on Iceland a fair amount, use the 'Search Blog" box. What caught our attention was this, from DealBreaker:

...Norway, in response to the bank failures in Iceland, had an interesting "mark-to-market" approach for assets in which no ready market exists. To wit:

The OMX Nordic Exchange said in a release late yesterday that it set the prices of the three nationalized banks to zero in the index after ``not being able to receive valuations from market participants.''

Take that, Rule 157. Between this and their bank re-capitalization plans, Scandinavia seems to know how to deal with a crisis without pussy-footing around, and without creating fictional marks to support flagging institutions. (It may help that in this case it is Norway setting marks on Icelandic banks, rather than Norway setting marks on Norwegian firms)....