Icelandic meltdown

The fall-out of the Icelandic banks collapsing has seen a lot of people claiming to have known disaster was about to strike. I have already held my hands up in the pages of the Daily Mail and admitted that I got this one wrong.

But what I find strange about this whole episode is the role of the FSA. After the Northern Rock debacle the FSA promised it would keep a much tighter rein on the banks.

So what happened? Why were consumers left to fend for themselves without any warning from our financial regulator that all was not well?

The fact Icesave came initially under the Icelandic compensation system is no excuse. Landsbanki was operating in the UK and the UK regulator must have had some insight into its financial position. It can find out far more about the inside story of a bank than any journalist or financial adviser could hope to.

But if it simply sits on that information then it is not doing its job properly. Perhaps the FSA was concerned that if it spoke out it might cause a run on the bank – but this was always going to happen once the true position of Landsbanki was discovered.

Part of the FSA's remit is to protect consumers and it has clearly failed in this instance. While helping with the shift of Heritable Bank and Kaupthing Edge money to ING, it cast the 200,000-plus who are in Icesave adrift.

These savers might have been promised that they will get their capital back. But they will lose interest and suffer months of anxiety waiting for their money.

So, once again, the FSA's inaction has led to real consumer detriment. If I had received just a hint from the FSA that something was amiss I would have got our readers out of there. But no hint was forthcoming - or if there was, it was so subtle it passed me by.

I'm not excusing myself, other journalists who recommended it or allowed Icesave to appear in best buy tables or financial advisers who sent their clients to Iceland. But I believe there is an onus on the regulator to make sure that when it knows there is something badly wrong that the information reaches the public domain.

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Are we there yet?

I have been noticing the increasing number of commentators and fund managers lining up to call the bottom of the market. I'm not sure whether this is a good idea or not. It is all very well looking like a clever clogs if you get it right but you must weigh this against the risk of egg on the chin.

Fidelity's Anthony Bolton is the most prominent figure to have done so. Jupiter's Edward Bonheim Carter has also talked of the value in some areas. He warns there could be further falls, but points out that Jupiter's fund managers, who are long-term investors, have been buying their own funds.

Bill Mott at Psigma is talking of the beginning of the end of the market havoc.