130-788: The Icesave dispute was a diplomatic dispute among Iceland , the Netherlands and the United Kingdom which began after the privately owned Icelandic bank Landsbanki was placed in receivership on 7 October 2008. As Landsbanki was one of three systemically important financial institutions in Iceland to go bankrupt within a few days, the Icelandic Depositors' and Investors' Guarantee Fund ( Tryggingarsjóður ) had no remaining funds to make good on deposit guarantees to foreign Landsbanki depositors who held savings in
260-608: A referendum in April 2011 , it was again rejected, by 59% of Icelandic voters. After analysing the election result, stakeholders decided not to attempt negotiation of a further improved Icesave bill 4 , but instead to refer the case to the EFTA Court as a legal dispute. On 28 January 2013, the EFTA Court cleared Iceland of all charges , meaning that Iceland was freed from the disputed obligation for deposit guarantees worth €4.0 bn (ISK 674 bn) plus accrued interest to UK and
390-420: A career in diplomacy. They were supported by their embassy staff. These professionals would be sent on longer assignments and would be far more knowledgeable than the higher-ranking officials about the host country. Embassy staff would include a wide range of employees, including some dedicated to espionage. The need for skilled individuals to staff embassies was met by the graduates of universities, and this led to
520-436: A diplomat does commit a serious crime while in a host country he or she may be declared as persona non grata (unwanted person). Such diplomats are then often tried for the crime in their homeland. Diplomatic communications are also viewed as sacrosanct, and diplomats have long been allowed to carry documents across borders without being searched. The mechanism for this is the so-called " diplomatic bag " (or, in some countries,
650-514: A dispute. These are similar to the conferences mentioned above, as there are technically no established rules or procedures. However, there are general principles and precedents which help define a course for such proceedings. Some examples are: Small state diplomacy is receiving increasing attention in diplomatic studies and international relations . Small states are particularly affected by developments which are determined beyond their borders such as climate change , water security and shifts in
780-517: A great increase in the study of international law , French, and history at universities throughout Europe. At the same time, permanent foreign ministries began to be established in almost all European states to coordinate embassies and their staffs. These ministries were still far from their modern form, and many of them had extraneous internal responsibilities. Britain had two departments with frequently overlapping powers until 1782. They were also far smaller than they are currently. France, which boasted
910-590: A levy on authorised financial services firms. The rules of the FSCS are made by the Financial Conduct Authority (FCA) and are contained in its handbook. The FSCS board of directors is appointed by and ultimately accountable to the FCA. It covers deposits , insurance, debt management, funeral plans, insurance, investments, pensions, mortgages and payment protection insurance to varying amounts. FSCS
1040-744: A means of intimidation to influence others. Since it is inherently coercive, it typically lies near the edge between peace and war, and is usually exercised in the context of imperialism or hegemony. An emblematic example is the Don Pacifico Incident in 1850, in which the United Kingdom blockaded the Greek port of Piraeus in retaliation for the harming of a British subject and the failure of Greek government to provide him with restitution. Financial Services Compensation Scheme The Financial Services Compensation Scheme ( FSCS )
1170-605: A move on 22 February, but for unknown reasons dropped the idea in April, and although the UK Financial Services Authority (FSA) in July 2008 had insisted such a transfer into a subsidiary should happen, Landsbanki continued to run Icesave as a foreign branch until it went bankrupt. When British Prime Minister Gordon Brown met with his Icelandic counterpart Geir Haarde in London on 24 April 2008, this
1300-689: A move they dubbed a "very unfriendly act". In a statement to the Althing on 15 October, Haarde again criticized the British government, saying that its actions "had nothing to do with salvaging British interests" and were "absolutely unacceptable". He also reiterated that Iceland was considering legal action against the UK. The next day, the Central Bank of Iceland stated that problems with international payments to and from Iceland were "directly attributable to
1430-502: A new version of the loan agreement, referred to as Icesave bill 2 , where no time limit was included for the Icelandic state's repayment guarantee. This was at first accepted by the Icelandic parliament, but the Icelandic president refused to enact the law and referred approval to a referendum being held on 6 March 2010 , where voters subsequently rejected the law. After the rejection of Icesave bill 2 , renewed negotiations started on
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#17327939271001560-459: A number of support staff; the term diplomat is thus sometimes applied broadly to diplomatic and consular personnel and foreign ministry officials. The term diplomacy is derived from the 18th-century French term diplomate ("diplomat" or "diplomatist"), based on the ancient Greek diplōma , which roughly means "an object folded in two". This reflected the practice of sovereigns providing a folded document to confer some official privilege; prior to
1690-502: A press statement where they announced now to have agreed with the European Union to work actively towards negotiating a mutual agreement with United Kingdom and Netherlands, on the terms for repayment of the Icelandic minimum deposit guarantees. After this outline agreement had been made about the contours for a future agreement, the former Foreign Minister Valgerður Sverrisdóttir from the opposition Progressive Party , criticized
1820-410: A rajmandala (grouping of states), a model that places the home state surrounded by twelve competing entities which can either be potential adversaries or latent allies, depending on how relations with them are managed. This is the essence of realpolitik. It also offers four upaya (policy approaches): conciliation, gifts, rupture or dissent, and force. It counsels that war is the last resort, as its outcome
1950-453: A rung below ambassador. Somewhere between the two was the position of minister plenipotentiary . Diplomacy was a complex affair, even more so than now. The ambassadors from each state were ranked by complex levels of precedence that were much disputed. States were normally ranked by the title of the sovereign; for Catholic nations the emissary from the Vatican was paramount, then those from
2080-486: A situation of mutually contesting kingdoms, the wise king builds alliances and tries to checkmate his adversaries. The envoys sent at the time to the courts of other kingdoms tended to reside for extended periods of time, and Arthashastra contains advice on the deportment of the envoy, including the trenchant suggestion that "he should sleep alone". The highest morality for the king is that his kingdom should prosper. New analysis of Arthashastra brings out that hidden inside
2210-465: A time in which rival states were starting to pay less attention to traditional respects of tutelage to the Zhou dynasty (c. 1050–256 BC) figurehead monarchs while each vied for power and total conquest. However, a great deal of diplomacy in establishing allies, bartering land, and signing peace treaties was necessary for each warring state, and the idealized role of the "persuader/diplomat" developed. From
2340-688: Is a policy of making concessions to an aggressor in order to avoid confrontation; because of its failure to prevent World War 2, appeasement is not considered a legitimate tool of modern diplomacy. Counterinsurgency diplomacy, or expeditionary diplomacy, developed by diplomats deployed to civil-military stabilization efforts in Iraq and Afghanistan, employs diplomats at tactical and operational levels, outside traditional embassy environments and often alongside military or peacekeeping forces. Counterinsurgency diplomacy may provide political environment advice to local commanders, interact with local leaders, and facilitate
2470-740: Is always uncertain. This is the first expression of the raison d'etat doctrine, as also of humanitarian law; that conquered people must be treated fairly, and assimilated. The key challenge to the Byzantine Empire was to maintain a set of relations between itself and its sundry neighbors, including the Georgians , Iberians , the Germanic peoples , the Bulgars , the Slavs , the Armenians ,
2600-413: Is free for consumers to use and, since 2001, has helped more than 4.5 million people and paid out more than £26 billion. Since 31 December 2010, maintaining a single customer view has become mandatory for United Kingdom banks and other deposit takers due to rules it introduced. There is currently a review on whether to increase insurance coverage from the current 90% to 100%, in order to align it with
2730-562: Is organised. It was not designed to deal with a systemic crisis but with the collapse of a single bank." The Icelandic government has repeatedly asked that the matter be taken to the EFTA Court , and points to Recital 24 to the directive: Whereas this Directive may not result in the Member States' or their competent authorities' being made liable in respect of depositors if they have ensured that one or more schemes guaranteeing deposits or credit institutions themselves and ensuring
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#17327939271002860-480: Is the UK's statutory compensation scheme for customers of UK authorised financial services firms. This means it can step in to pay compensation if a firm is unable, or likely to be unable, to pay claims against it. Compensation can be in any form and by any method it determines is appropriate. It is an operationally independent body, set up under the Financial Services and Markets Act 2000 and funded by
2990-566: Is to illegally gather intelligence, usually by coordinating spy rings of locals or other spies. For the most part, spies operating out of embassies gather little intelligence themselves and their identities tend to be known by the opposition. If discovered, these diplomats can be expelled from an embassy, but for the most part counter-intelligence agencies prefer to keep these agents in situ and under close monitoring. The information gathered by spies plays an increasingly important role in diplomacy. Arms-control treaties would be impossible without
3120-581: The Peter Paul and Others case, "Directive 94/19 seeks to introduce cover for depositors, wherever deposits are located in the Community, in the event of the unavailability of deposits made with a credit institution which is a member of a deposit guarantee-scheme". The directive does not specify how the Member States have to provide the cover, although most operate some sort of fund to which credit institutions contribute, as in Iceland. In principle, if
3250-657: The Althing , in response to the "unusual financial market circumstances". In a separate measure, the government also guaranteed "that deposits in domestic commercial and savings banks and their branches in Iceland will be fully covered." That evening, the Guernsey subsidiary of Landsbanki went into voluntary administration with the approval of the Guernsey Financial Services Commission . The administrators later said that "The main reason for
3380-579: The Battle of Baideng (200 BC) to the Battle of Mayi (133 BC), the Han dynasty was forced to uphold a marriage alliance and pay an exorbitant amount of tribute (in silk, cloth, grain, and other foodstuffs) to the powerful northern nomadic Xiongnu that had been consolidated by Modu Shanyu . After the Xiongnu sent word to Emperor Wen of Han (r. 180–157) that they controlled areas stretching from Manchuria to
3510-641: The Depositors' and Investors' Guarantee Fund ( Tryggingarsjóður ) funded by 1 per cent of insured deposits. At the time of Landsbanki's collapse, the Tryggingarsjóður had equity of only ISK 10.8 billion, about €68 million at the exchange rates of the time and far from sufficient to cover the Dutch and British claims. As pointed out by the European Court of Justice in
3640-597: The European Economic Area (EEA), and around two positions in particular: The Icelandic government disputes these positions. Within the EEA, the requirement for deposit insurance is regulated by European Union directive 94/19/EC, which was incorporated into EEA law by decision 18/94 of the EEA Joint Committee . Iceland transposed the directive into national law in 1999, setting up
3770-598: The European Union and EU member states were putting pressure on Icelandic authorities to reach an agreement with Britain and the Netherlands over the Icesave dispute, and this would be a prerequisite to activation of the bailout loans Iceland had applied for, from International Monetary Fund (IMF) and other EU member countries. On 16 November 2008, a small positive step was made in the dispute, when Iceland made
3900-426: The European Union and adoption of the euro as national currency, he also claimed that "[i]f we were tied to the euro, […] we would just have to succumb to the laws of Germany and France." Two days later, on 9 October, the Icelandic assets and liabilities of Landsbanki were transferred to a new government-owned bank, Nýi Landsbanki . As Landsbanki had been acquiring assets in Iceland with foreign loans and deposits,
4030-594: The Falklands war in 1982. The powers themselves date from the Defence (General) Regulations 1939 . Also on 8 October, the Prime Minister Geir Haarde issued a statement saying "The Icelandic government appreciates that the British authorities are willing to step in and respond to the immediate concerns of depositors of Landsbankinn Icesave accounts" and that "There is a good probability that
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4160-634: The French Revolution . Some of the earliest known diplomatic records are the Amarna letters written between the pharaohs of the eighteenth dynasty of Egypt and the Amurru rulers of Canaan during the 14th century BC. Peace treaties were concluded between the Mesopotamian city-states of Lagash and Umma around approximately 2100 BC. Following the Battle of Kadesh in 1274 BC during
4290-689: The Huns , the Avars , the Franks , the Lombards , and the Arabs , that embodied and so maintained its imperial status. All these neighbors lacked a key resource that Byzantium had taken over from Rome, namely a formalized legal structure. When they set about forging formal political institutions, they were dependent on the empire. Whereas classical writers are fond of making a sharp distinction between peace and war, for
4420-741: The Ptolemaic Kingdom and Seleucid Empire , which fought several wars in the Near East and often negotiated peace treaties through marriage alliances . Relations with the Ottoman Empire were particularly important to Italian states, to which the Ottoman government was known as the Sublime Porte . The maritime republics of Genoa and Venice depended less and less upon their nautical capabilities, and more and more upon
4550-539: The Tarim Basin oasis city-states, a treaty was drafted in 162 BC proclaiming that everything north of the Great Wall belong to nomads' lands, while everything south of it would be reserved for Han Chinese . The treaty was renewed no less than nine times, but did not restrain some Xiongnu tuqi from raiding Han borders. That was until the far-flung campaigns of Emperor Wu of Han (r. 141–87 BC) which shattered
4680-636: The Treaty of Rome . The contention is that, by guaranteeing deposits at Icelandic branches but not at overseas branches, the Icelandic government is unfairly (or "illegally") favouring Icelanders, be they individuals or corporations. Iceland roundly denies the charge of discrimination. The jurisprudence of the European Court of Justice is summarized in the García Avello case: It is in this regard [ Articles 12 EC and 17 EC ] settled case-law that
4810-563: The global economy . Diplomacy is the main vehicle by which small states are able to ensure that their goals are addressed in the global arena. These factors mean that small states have strong incentives to support international cooperation. But with limited resources at their disposal, conducting effective diplomacy poses unique challenges for small states. There are a variety of diplomatic categories and diplomatic strategies employed by organizations and governments to achieve their aims, each with its own advantages and disadvantages. Appeasement
4940-433: The kingdoms , then those from duchies and principalities . Representatives from republics were ranked the lowest (which often angered the leaders of the numerous German, Scandinavian, and Italian republics). Determining precedence between two kingdoms depended on a number of factors that often fluctuated, leading to near-constant squabbling. Ambassadors were often nobles with little foreign experience and no expectation of
5070-623: The nineteenth dynasty , the pharaoh of Egypt and the ruler of the Hittite Empire created one of the first known international peace treaties, which survives in stone tablet fragments , now generally called the Egyptian–Hittite peace treaty . The ancient Greek city-states on some occasions dispatched envoys to negotiate specific issues, such as war and peace or commercial relations, but did not have diplomatic representatives regularly posted in each other's territory. However, some of
5200-502: The "diplomatic pouch"). While radio and digital communication have become more standard for embassies, diplomatic pouches are still quite common and some countries, including the United States, declare entire shipping containers as diplomatic pouches to bring sensitive material (often building supplies) into a country. In times of hostility, diplomats are often withdrawn for reasons of personal safety, as well as in some cases when
5330-413: The 1961 Vienna Convention on Diplomatic Relations , ratified by most of the world's sovereign states, provides a framework for diplomatic procedures, methods, and conduct. Most diplomacy is now conducted by accredited officials , such as envoys and ambassadors, through a dedicated foreign affairs office . Diplomats operate through diplomatic missions , most commonly consulates and embassies, and rely on
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5460-466: The 6,000 aphorisms of prose (sutras) are pioneering political and philosophic concepts. It covers the internal and external spheres of statecraft, politics and administration. The normative element is the political unification of the geopolitical and cultural subcontinent of India. This work comprehensively studies state governance; it urges non-injury to living creatures, or malice, as well as compassion, forbearance, truthfulness, and uprightness. It presents
5590-908: The Bank’s difficulties has been the placing of funds with its UK fellow subsidiary, Heritable Bank ." Guernsey's Chief Minister stated "the directors of Landsbanki Guernsey took appropriate steps by putting the bank into administration." The FME placed Landsbanki in receivership early on 7 October. A press release from the FME stated that all of Landsbanki's Icelandic branches, call centres, ATMs and internet operations will be open for business as usual, and that all "domestic deposits" were fully guaranteed. The Icesave UK website announced: "We are not currently processing any deposits or any withdrawal requests through our Icesave internet accounts. We apologise for any inconvenience this may cause our customers. We hope to provide you with more information shortly." That evening, one of
5720-444: The British decision, Iceland decided to submit a formal complaint to NATO about their move, and it also provoked more than 80,000 Icelandics (equal to 25% of its entire population) to sign an online petition set up under the heading "Icelanders are not terrorists". The relationship became more tense, and Iceland made it clear that UK patrols in its airspace were not appropriate given the state of affairs and subsequently on 14 November
5850-465: The Byzantines diplomacy was a form of war by other means. With a regular army of 120,000–140,000 men after the losses of the 7th century, the empire's security depended on activist diplomacy. Byzantium's " Bureau of Barbarians " was the first foreign intelligence agency, gathering information on the empire's rivals from every imaginable source. While on the surface a protocol office—its main duty
5980-660: The Chinese had sent envoys into Central Asia, India, and Persia , starting with Zhang Qian in the 2nd century BC. Another notable event in Chinese diplomacy was the Chinese embassy mission of Zhou Daguan to the Khmer Empire of Cambodia in the 13th century. Chinese diplomacy was a necessity in the distinctive period of Chinese exploration . Since the Tang dynasty (618–907 AD), the Chinese also became heavily invested in sending diplomatic envoys abroad on maritime missions into
6110-588: The Directive. The ruling of the European Court of Justice in Peter Paul and Others , the only case to have considered Directive 94/19/EC, begins: "If the compensation of depositors […] is ensured, …". The ECJ then went on to uphold the immunity of the German authorities from civil liability for alleged failings in banking supervision (as per Recital 24) given that the depositors had been compensated up to
6240-565: The Fund beyond their statutory contributions to the Fund." The Icelandic government has stated that the directive was never intended to cover the case of a systemic failure, and does not impose a sovereign guarantee on deposit insurance schemes. In a speech on 3 March 2009, the Dutch Finance Minister Wouter Bos said: "First and foremost, European countries need to take a close look at how the deposit guarantee scheme
6370-553: The Fund would be able to meet the minimum compensation limits in the event of a failure of Landsbanki and its UK branch." On the afternoon of 7 October, after Landsbanki had been placed into receivership – but before the Central Bank of Iceland chief, Davíð Oddsson , made his live public television appearance about how the Icelandic State would respond to foreign debt obligations left by bankrupt banks,
6500-802: The German Chancellor Otto von Bismarck were renowned for international diplomacy. Diplomats and historians often refer to a foreign ministry by its address: the Ballhausplatz (Vienna), the Quai d'Orsay (Paris), the Wilhelmstrasse (Berlin), Itamaraty (Brasília), and Foggy Bottom (Washington, D.C.). For the Russian foreign ministry, it was the Choristers' Bridge (Saint Petersburg) until 1917, while "Consulta" referred to
6630-485: The Icelandic banks were in a serious situation and that immediate action was needed to manage the current situation. CBI was advised to make a request towards Landsbanki, that they should prepare for a transfer of the Icesave accounts from their foreign branch into a UK subsidiary , so that it could be subject to UK law for bank supervision and the UK minimum deposit guarantee scheme . Landsbanki indeed sought legal advice for such
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#17327939271006760-541: The Icesave branch of the bank. When Landsbanki was placed into receivership by the Icelandic Financial Supervisory Authority (FME), 343,306 retail depositors in the UK and Netherlands that held accounts in the "Icesave" branch of Landsbanki lost a total of €6.7 bn of savings. Because no immediate repayment was expected by any Icelandic institutions, the Dutch and British national deposit guarantee schemes covered repayment up to
6890-421: The Icesave dispute had got underway, it became clear that there had been several high-level contacts between the British and Icelandic governments in the weeks (and even months) before Landsbanki's collapse. On 12 February 2008, at an International meeting in London, the Central Bank of Iceland (CBI) received the first warning sign by representatives from foreign banks and credit rating agencies, who concluded that
7020-746: The Indian Ocean, to India, Persia, Arabia , East Africa, and Egypt. Chinese maritime activity was increased dramatically during the commercialized period of the Song dynasty, with new nautical technologies, many more private ship owners, and an increasing amount of economic investors in overseas ventures. During the Mongol Empire (1206–1294) the Mongols created something similar to today's diplomatic passport called paiza . The paiza were in three different types (golden, silver, and copper) depending on
7150-406: The Italian foreign ministry, based in the Palazzo della Consulta (Rome) from 1874 to 1922. The sanctity of diplomats has long been observed, underpinning the modern concept of diplomatic immunity . While there have been a number of cases where diplomats have been killed, this is normally viewed as a great breach of honor. Genghis Khan and the Mongols were well known for strongly insisting on
7280-418: The Netherlands. This caused shock, as some legal experts had suggested the EFTA Surveillance Authority would win. The repayment claim still existed as a claim on the Landsbanki receivership, who one year earlier had been ordered by the Supreme Court of Iceland to repay confiscated deposits (including minimum deposit guarantees) as priority claims, totaling ISK 852 bn (£4.46 bn, €5.03 bn) to
7410-445: The Tang finally made a truce and signed a peace treaty with them in 841. In the 11th century during the Song dynasty (960–1279), there were shrewd ambassadors such as Shen Kuo and Su Song who achieved diplomatic success with the Liao dynasty , the often hostile Khitan neighbor to the north. Both diplomats secured the rightful borders of the Song dynasty through knowledge of cartography and dredging up old court archives. There
7540-400: The Treasury went on to freeze the assets of Landsbanki and assets belonging to the Central Bank of Iceland, and the Government of Iceland relating to Landsbanki. The freezing order took advantage of provisions in Part 2 of the Anti-terrorism, Crime and Security Act 2001 , and was made "because the Treasury believed that action to the detriment of the UK's economy (or part of it) had been or
7670-418: The UK Financial Services Compensation Scheme and ISK 282 bn (€1.67 bn) to De Nederlandsche Bank . By January 2016, the Landsbanki receivership had, through liquidation of assets, repaid all the priority claims. Icesave was an online savings account brand owned and operated by the private Landsbanki bank from 2006 to 2008 that offered savings accounts . It operated in two countries –
7800-405: The UK Chancellor had a telephone conversation with his Icelandic counterpart Finance Minister Árni Mathiesen in which the question of deposit insurance was raised: On 8 October, Alistair Darling announced that he was taking steps to freeze the assets of Landsbanki in the UK. Under the Landsbanki Freezing Order 2008 , passed at 10 a.m. on 8 October 2008 to come into force ten minutes later,
7930-431: The UK FSA, might instead have been as high as 50 percent of the Icesave banks retail deposits (some ten-times higher), a figure which would have paralysed Landsbanki's retail operations in London. The UK FSA and Treasury subsequently denied ever to have offered such an agreement, as no such document existed in their archives. Officials from the UK Treasury were in Reykjavík over the weekend of 4–5 October discussing
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#17327939271008060-548: The UK also managed to seize its assets and transfer them to the Dutch bank ING. The Landsbanki Freezing Order was the first time that the UK government had used its powers to impose unilateral financial sanctions since those powers were revised in 2001. Such unilateral sanctions have never been common, but the previous version of these powers (section 2, Emergency Laws (Re-enactments and Repeals) Act 1964) had been used against Rhodesia after its Unilateral Declaration of Independence in 1965, and against Argentina during
8190-462: The UK and the Netherlands. In this case, German authorities quickly seized all assets and deposits in Germany before the Icelandic managers were able to move them, thus preventing them from being transferred to Iceland or other offshore accounts. German depositors started to get their capital back on 22 June 2009, but lost accrued interest. There had been concern about possible weakness of the Icelandic banking system throughout 2008, especially following
8320-448: The UK at the time of the crisis, at a cost of some £1.4 billion (€1.7bn). Finally, the emergency powers, passed by the Althing on the night of 6 October, contain a measure (Art. 8(a)) stating in regard of the Tryggingarsjóður : "It shall always be permissible to reimburse the value of deposits, securities, or cash in Icelandic currency (ISK), even though the original transactions may have been in another currency." Fortunately for
8450-415: The UK authorities" in front of the Federation of Icelandic Fishing Vessel Owners the following day. The President of Iceland Ólafur Ragnar Grímsson , who normally has only a figurehead role in Icelandic politics, made comments about Britain at an informal lunch with foreign diplomats on 7 November: his comments about Britain were described as "directly insulting" by a Norwegian diplomat present. Angered by
8580-489: The UK had to cancel its patrols and defense of the Icelandic airspace, which before the dispute had been scheduled to start in December 2008. Iceland has no standing army of its own, and relies on a long-term standing agreement with NATO where a group of member states have committed in turns to defend the Icelandic airspace, and the UK Royal Air Force had now cancelled this after mutual agreement with NATO (although presumably with another member state having accepted to takeover
8710-483: The UK have higher guarantee levels, €100,000 and £50,000 (approx. €60,000) respectively; Landsbanki was a member of the Dutch and British compensation schemes for the purposes of guaranteeing this difference in cover, an arrangement known in Britain as the "passport system", and commonly used by banks throughout the EEA (see MIFID ). In addition, the UK Treasury has exceptionally guaranteed retail deposits in excess of £50,000 which were held in Icelandic-owned banks in
8840-457: The United Kingdom (from October 2006) and the Netherlands (from May 2008). The bank intended to roll the brand out to additional territories in 2008 and 2009. In the UK, Icesave's marketing slogan was "clear difference", and it offered three types of savings accounts: an immediate-access savings account, cash ISA ( Individual Savings Account ), and a range of fixed-rate bonds . Interest rates on these accounts were over 6 per cent, among
8970-450: The United Kingdom, 123 local authorities and other public bodies had a total of £920 million (€1.1bn) deposited with Icelandic banks. Even the Audit Commission , the independent body responsible for overseeing local government finances, admitted having £10 million deposited with Landsbanki and its subsidiary Heritable Bank. In the Netherlands, 22 local authorities had a total of €220 million deposited in Icelandic banks, with
9100-415: The United States, and France. Ancient India , with its kingdoms and dynasties, had a long tradition of diplomacy. The oldest treatise on statecraft and diplomacy, Arthashastra , is attributed to Kautilya (also known as Chanakya ), who was the principal adviser to Chandragupta Maurya , the founder of the Maurya dynasty who ruled in the 3rd century BC. It incorporates a theory of diplomacy, of how in
9230-474: The assets of Nýi Landsbanki exceeded its liabilities (domestic deposits and government equity capital) by ISK 558.1 billion (€3.87bn, £3.06bn), even after Nýi Landsbanki had made provisions for over half its loans to customers. Icesave deposits, along with all foreign borrowings, remained in the old Landsbanki, which was left with ISK 1743 billion (€12.1bn, £9.56bn) in assets to face up to ISK 3197 billion of liabilities (€22.2bn, £17.5bn). Once
9360-535: The best rates offered by online banks to UK customers at the time (2006–07). At the time of Landsbanki's collapse, the bank had over 300,000 Icesave customers in the UK, with deposits of over £4 billion (€5 billion). In the Netherlands, Icesave's marketing slogan was "de transparante spaarbank" (English: "the transparent savings bank"). It offered a single type of account: an immediate-access savings account which initially offered 5 per cent interest, later increased to 5.25 per cent. In
9490-631: The board , that the UK FSA had agreed to takeover the liability for minimum Icesave deposit guarantees under the UK Financial Services Compensation Scheme (FSCS) in return for a liquidity deposit (most likely in the form of an external bank guarantee ) of £200 million (€240 million). British newspaper The Independent however reported, that the requested liquidity deposit in order to takeover liabilities for minimum deposit guarantees, allegedly proposed by
9620-424: The collapse in mid-September of U.S. financial-services firm Lehman Brothers . Matters came to a head during the weekend of 4–5 October, with numerous comments in the British press and on discussion forums questioning the solvency of Icelandic banks. This prompted a run on deposits in the UK (and possibly in other markets). On 6 October, the Icelandic government pushed an emergency law through Iceland's parliament,
9750-453: The compensation or protection of depositors under the conditions prescribed in this Directive have been introduced and officially recognized; The Member States of the European Union contest the interpretation of the Icelandic government, and consider that a sovereign "guarantee of last resort", similar to the role of central banks as lenders of last resort , is the only way of "ensuring the compensation or protection of depositors" as required by
9880-509: The conquest of foreign cultures would be better achieved by having his Macedonian and Greek subjects intermingle and intermarry with native populations. For instance, Alexander took as his wife a Sogdian woman of Bactria , Roxana , after the siege of the Sogdian Rock , in order to placate the rebelling populace. Diplomacy remained a necessary tool of statecraft for the great Hellenistic states that succeeded Alexander's empire, such as
10010-463: The convening of international conferences. In such cases, there are fewer ground rules, and fewer formal applications of international law. However, participants are expected to guide themselves through principles of international fairness, logic, and protocol. Some examples of these formal conferences are: Sometimes nations convene official negotiation processes to settle a specific dispute or specific issue between several nations which are parties to
10140-497: The decline in value of the ISK, Icelandic króna , (35 per cent from January to September 2008). Iceland's three major banks: Kaupthing , Landsbanki and Glitnir were all highly leveraged by international standards, and their combined foreign debt was more than five times Iceland's gross domestic product (GDP). With the financial crisis of 2007–08 , this debt was becoming increasingly difficult to refinance , especially after
10270-498: The deposits of customers of Bradford & Bingley . The compensation limits were last revised in 2010 to bring them into line with the EU (and EEA) deposit guarantee requirements under the European Union directive 94/19/E. On 31 August 2012 UK authorised banks, building societies and credit unions were required to display information about FSCS protection in branch and online, this included posters and window stickers. This action followed
10400-552: The disclosure requirements and uses icons of protection to engage with the consumers and highlight the safety FSCS provides to savings and deposits. The FSCS is funded by levies on firms authorised by the Prudential Regulation Authority and the Financial Conduct Authority . FSCS's costs are made up of management expenses and compensation payments. The FSCS protects UK authorised banks, building societies and credit unions up to £85,000 per depositor in
10530-591: The envoy's level of importance. With the paiza, there came authority that the envoy can ask for food, transport, place to stay from any city, village, or clan within the empire with no difficulties. In the 17th century, the Qing dynasty concluded a series of treaties with Czarist Russia, beginning with the Treaty of Nerchinsk in 1689. This was followed up by the Aigun Treaty and the Convention of Peking in
10660-459: The extremely harmful actions taken by the British authorities" a claim that was repeated on 21 October. The allegations were reiterated by Davíð Oddsson, chairman of the governors of the central bank, on 18 November: When the bulk of our banking system collapsed in the space of a few days in October and the British placed a fellow NATO member on a list together with the most notorious terrorists on
10790-469: The fall of Napoleon, the Congress of Vienna of 1815 established an international system of diplomatic rank . Disputes on precedence among nations (and therefore the appropriate diplomatic ranks used) were first addressed at the Congress of Aix-la-Chapelle in 1818, but persisted for over a century until after World War II , when the rank of ambassador became the norm. In between that time, figures such as
10920-528: The five months that it operated in the Netherlands, Icesave attracted more than 125,000 customers who deposited €1.7 billion. Icesave accounts were accounts with Landsbanki's branches in London and Amsterdam, as the logo used in the United Kingdom made clear: "Icesave, part of Landsbanki, Reykjavik, Iceland". As Icesave was marketed as part of Landsbanki, the later complaints of the United Kingdom and Netherlands related to different treatment of Icelandic Landsbanki accounts and Icesave accounts. Kaupthing Edge
11050-605: The form of formal arbitrations and mediations. In such cases a commission of diplomats might be convened to hear all sides of an issue, and to come some sort of ruling based on international law. In the modern era, much of this work is often carried out by the International Court of Justice at The Hague , or other formal commissions, agencies and tribunals, working under the United Nations. Below are some examples. Other times, resolutions were sought through
11180-557: The functions given to modern diplomatic representatives were fulfilled by a proxenos , a citizen of the host city who had friendly relations with another city, often through familial ties. In times of peace, diplomacy was even conducted with non-Hellenistic rivals such as the Achaemenid Empire of Persia, through it was ultimately conquered by Alexander the Great of Macedon. Alexander was also adept at diplomacy, realizing that
11310-470: The fund cannot meet depositors' claims in the event of a default by a member of the scheme, it is for the remaining credit institutions to make up the difference. Such a move was impossible in the case of the Tryggingarsjóður as the remaining Icelandic credit institutions were far too small in relation to the claims of Icesave depositors, and a fortiori because Icelandic law states that "Member Companies shall not be liable for any commitments entered into by
11440-449: The governance efforts, functions and reach of a host government. Debt-trap diplomacy is carried out in bilateral relations, with a powerful lending country seeking to saddle a borrowing nation with enormous debt so as to increase its leverage over it. Economic diplomacy is the use of aid or other types of economic policy as a means to achieve a diplomatic agenda. Gunboat diplomacy is the use of conspicuous displays of military power as
11570-569: The governors of the Central Bank of Iceland , former Prime Minister Davíð Oddsson , was interviewed on Icelandic public service broadcaster RÚV and stated that "we [the Icelandic State] do not intend to pay the debts of the banks that have been a little heedless". He compared the government's measures to the U.S. intervention at Washington Mutual , and suggested that foreign creditors would "unfortunately only get 5–10–15% of their claims". A long-standing opponent of Icelandic membership of
11700-524: The guarantee fund. Originally this was because the state lost funding access at credit markets due to the Icelandic financial crisis , but later proposed bilateral loan guarantees for repayment were rejected by Icelandic voters in two separate referendums. The Icesave disputes and associated referendums sparked a nationalist backlash in Iceland, which some scholars have attributed as a factor in reducing support in Iceland for EU accession. The Icesave bill 1
11830-540: The host countries. In four cases Kaupthing Edge accounts were held in branches: In Finland and Norway, the local financial supervisors took over Kaupthing's operations and guaranteed deposits. In Austria, a private agreement was reached between the Austrian authorities and Kaupthing's receivers, with accounts being transferred to other banks. In Germany there were serious problems with deposit insurance – identical to those suffered by Icesave depositors in
11960-523: The host country is friendly but there is a perceived threat from internal dissidents. Ambassadors and other diplomats are sometimes recalled temporarily by their home countries as a way to express displeasure with the host country. In both cases, lower-level employees still remain to actually do the business of diplomacy. Diplomacy is closely linked to espionage or gathering of intelligence. Embassies are bases for both diplomats and spies, and some diplomats are essentially openly acknowledged spies. For instance,
12090-465: The interests of all the German princes (who were in theory all subordinate to the Emperor, but in practice each independent). Between 1500 and 1700, rules of modern diplomacy were further developed. French replaced Latin from about 1715. The top rank of representatives was an ambassador. At that time an ambassador was a nobleman, the rank of the noble assigned varying with the prestige of the country he
12220-600: The introduction of new Financial Services Authority (FSA) rules obliging deposit takers to display information about FSCS protection available to consumers. The UK branches of foreign banks from the European Economic Area (EEA) have to specify that their customers are not covered by FSCS and clearly state which national scheme provides protection. On 14 January 2013 FSCS launched a consumer awareness programme, aiming to reassure consumers and boost confidence, thereby aiding financial stability. It follows on from
12350-401: The invention of the envelope, folding a document served to protect the privacy of its content. The term was later applied to all official documents, such as those containing agreements between governments, and thus became identified with international relations. This established history has in recent years been criticized by scholars pointing out how the term originates in the political context of
12480-409: The job of military attachés includes learning as much as possible about the military of the nation to which they are assigned. They do not try to hide this role and, as such, are only invited to events allowed by their hosts, such as military parades or air shows . There are also deep-cover spies operating in many embassies. These individuals are given fake positions at the embassy, but their main task
12610-674: The largest foreign affairs department, had only some 70 full-time employees in the 1780s. The elements of modern diplomacy slowly spread to Eastern Europe and Russia, arriving by the early 18th century. The entire edifice would be greatly disrupted by the French Revolution and the subsequent years of warfare. The revolution would see commoners take over the diplomacy of the French state, and of those conquered by revolutionary armies. Ranks of precedence were abolished. Napoleon also refused to acknowledge diplomatic immunity, imprisoning several British diplomats accused of scheming against France. After
12740-588: The liability). A deviating Icelandic response, compared to the general Icelandic opinion about the Icesave dispute – as it had been reflected by the Icelandic government and media, came on 13 November from Björgólfur Guðmundsson , the former chairman and leading shareholder in Landsbanki, who in the eyes of the media now had become an unpopular figure in Iceland after his bank's collapse, but presumably had more popularity in Great Britain as
12870-466: The maximum limit for the national deposit guarantees – and the Dutch and British states covered the rest. The dispute centred on the demand by the British and Dutch states that the Icelandic state should repay the Icelandic minimum deposit guarantees (up to €20,887 per account holder), equal to £2.35 bn (€2.7 bn) repaid to the UK and €1.3 bn repaid to the Netherlands. The Icelandic state refused to take on this liability on behalf of
13000-625: The mid-19th century. As European power spread around the world in the 18th and 19th centuries so too did its diplomatic model, and Asian countries adopted syncretic or European diplomatic systems. For example, as part of diplomatic negotiations with the West over control of land and trade in China in the 19th century after the First Opium War , the Chinese diplomat Qiying gifted intimate portraits of himself to representatives from Italy, England,
13130-430: The minimum set by the Directive. The Directive imposes a minimum guarantee of €20,000 per depositor; moves to increase this minimum to €50,000 or even higher had been agreed politically before the Icelandic crisis, but had not been incorporated into EU law, much less into EEA law. The Tryggingarsjóður guarantees ISK 1.7 million on the basis of a fixed euro–ISK exchange rate, equivalent to €20,887. The Netherlands and
13260-465: The model of governance. The Japanese sent frequent embassies to China in this period, although they halted these trips in 894 when the Tang seemed on the brink of collapse. After the devastating An Shi Rebellion from 755 to 763, the Tang dynasty was in no position to reconquer Central Asia and the Tarim Basin . After several conflicts with the Tibetan Empire spanning several different decades,
13390-476: The nationality of the persons concerned" (the consideration being the location of the branches of the collapsed banks) and are "proportionate to the objective being legitimately pursued" (the legitimate objective being the survival of a banking system – and hence a non-barter economy – in Iceland). The situation is complicated by the position of so-called "wholesale" depositors. In
13520-465: The need to accept emissaries was recognized. Soon the major European powers were exchanging representatives. Spain was the first to send a permanent representative; it appointed an ambassador to the Court of St. James's (i.e. England) in 1487. By the late 16th century, permanent missions became customary. The Holy Roman Emperor , however, did not regularly send permanent legates, as they could not represent
13650-537: The need to accommodate themselves diplomatically, due to the emergence of the powerful political environment of the Ottoman Empire. One could come to the conclusion that the atmosphere of diplomacy within the early modern period revolved around a foundation of conformity to Ottoman culture. One of the earliest realists in international relations theory was the 6th-century BC military strategist Sun Tzu (d. 496 BC), author of The Art of War . He lived during
13780-483: The owner of West Ham United football club. On the Kastljós programme on RÚV on 13 November, he stated that Landsbanki's remaining assets according to his knowledge should be enough to cover the claims of British and Dutch Icesave depositors. He thus directly contradicted the recent statement by Geir Haarde, that the UK was insisting on "conditions that would ruin our economy". In November, media reports indicated that
13910-573: The perpetuation of good relations with the Ottomans. Interactions between various merchants, diplomats and clergymen hailing from the Italian and Ottoman empires helped inaugurate and create new forms of diplomacy and statecraft . Eventually the primary purpose of a diplomat, which was originally a negotiator, evolved into a persona that represented an autonomous state in all aspects of political affairs. It became evident that all other sovereigns felt
14040-601: The planet – a list that included not only Landsbanki but also the Republic of Iceland – it was no wonder that foreign exchange activity between Iceland and other nations should be utterly paralysed. Haarde, before the Althing again on 30 October, criticized the UK's "absurd decision to invoke the Terrorism Act against Icelandic interests in Britain", which became "the virulent measures of
14170-623: The position of the Icelandic-owned banks operating in the UK, after Glitnir had failed to repay British wholesale depositors on Friday 3 October. The result of the meeting was a letter dated 5 October 2008 on behalf of the Icelandic Minister for Business Affairs , stating that: "If needed the Icelandic Government will support the Depositors' and Investors' Guarantee Fund in raising the necessary funds, so that
14300-678: The power of reconnaissance satellites and agents to monitor compliance. Information gleaned from espionage is useful in almost all forms of diplomacy, everything from trade agreements to border disputes. Various processes and procedures have evolved over time for handling diplomatic issues and disputes. Nations sometimes resort to international arbitration when faced with a specific question or point of contention in need of resolution. For most of history, there were no official or formal procedures for such proceedings. They were generally accepted to abide by general principles and protocols related to international law and justice. Sometimes these took
14430-461: The principle of non-discrimination requires that comparable situations must not be treated differently and that different situations must not be treated in the same way. Such treatment may be justified only if it is based on objective considerations independent of the nationality of the persons concerned and is proportionate to the objective being legitimately pursued. Iceland contends that its actions are "based on objective considerations independent of
14560-422: The province of North Holland being the most exposed. Diplomacy Diplomacy comprises spoken or written communication by representatives of state , intergovernmental , or non-governmental institutions intended to influence events in the international system. Diplomacy is the main instrument of foreign policy which represents the broader goals and strategies that guide a state's interactions with
14690-540: The resolution expresses regret that "significant pressure seems to have been employed" by the IMF on Iceland to reach an agreement with the United Kingdom and the Netherlands. The second, if not primary claim of the British and Dutch governments is that Iceland is in breach of its obligations under Article 4 of the EEA Agreement which prohibits "any discrimination on grounds of nationality", echoing Article 7 of
14820-471: The rest of the protection regime. The FSCS came into existence in 2001 and replaced former multiple schemes. Between 2001 and 2006 the scheme paid out close to 1 billion pounds in compensation. In the period from 2006 to 2011 the financial crisis resulted in compensation of over 26 billion pounds being paid out by the FSCS. In 2008 the FSCS was given a loan by the Bank of England in order to be able to guarantee
14950-452: The rest of the world. International treaties , agreements , alliances , and other manifestations of international relations are usually the result of diplomatic negotiations and processes. Diplomats may also help shape a state by advising government officials . Modern diplomatic methods, practices, and principles originated largely from 17th-century European customs. Beginning in the early 20th century, diplomacy became professionalized;
15080-461: The rights of diplomats, and they would often wreak horrific vengeance against any state that violated these rights. Diplomatic rights were established in the mid-17th century in Europe and have spread throughout the world. These rights were formalized by the 1961 Vienna Convention on Diplomatic Relations , which protects diplomats from being persecuted or prosecuted while on a diplomatic mission. If
15210-400: The ruling Independence Party by stating: "I think reaching an agreement was the only way to go...[they shall be criticized] for believing that they can get away with corresponding with other nations in such a way [as they did]", while she added that Britain's behaviour could also not be excused. The arguments of the British and Dutch governments are based on their interpretation of the law of
15340-480: The states of Northern Italy in the early Renaissance , with the first embassies being established in the 13th century. Milan played a leading role, especially under Francesco Sforza who established permanent embassies to the other city states of Northern Italy. Tuscany and Venice were also flourishing centers of diplomacy from the 14th century onward. It was in the Italian Peninsula that many of
15470-515: The terms for the repayment agreement. The negotiations resulted, in December 2010, in an adjusted agreement named Icesave bill 3 , with better terms for Iceland. This included the removal of a previous creditor priority issue, a lower 3% interest rate, an interest moratorium until 1 October 2009, and a possible extension of the "repayment window" up to 30 years. When the Icesave bill 3 was put to
15600-500: The total assets of Landsbankinn will be sufficient to cover the deposits in IceSave." Later that day, he said that the Icelandic government was in no way running away from its obligations and suggested that Brown's remarks were grounded in a misunderstanding. On the following day Haarde said at a press conference that the Icelandic government was outraged that the UK government applied provisions of "anti-terrorism legislation" to it in
15730-475: The traditions of modern diplomacy began, such as the presentation of an ambassador's credentials to the head of state . From Italy, the practice was spread across Europe. Milan was the first to send a representative to the court of France in 1455. However, Milan refused to host French representatives, fearing they would conduct espionage and intervene in its internal affairs. As foreign powers such as France and Spain became increasingly involved in Italian politics
15860-692: The unity of the Xiongnu and allowed Han to conquer the Western Regions ; under Wu, in 104 BC the Han armies ventured as far Fergana in Central Asia to battle the Yuezhi who had conquered Hellenistic Greek areas . The Koreans and Japanese during the Chinese Tang dynasty (618–907 AD) looked to the Chinese capital of Chang'an as the hub of civilization and emulated its central bureaucracy as
15990-584: The value of the ISK, it has never been seriously suggested that the Tryggingarsjóður pay out more than ISK 600 billion to British and Dutch depositors, simply to see them try to sell those ISK on the open market. A resolution of the Joint Parliamentary Committee of the EEA adopted unanimously on 28 October 2009, notes the "lack of clarity" of EU Directive 94/19/EC over the legal obligations of governments if national guarantee funds do not suffice to cover deposit guarantees; moreover,
16120-526: Was also a triad of warfare and diplomacy between these two states and the Tangut Western Xia dynasty to the northwest of Song China (centered in modern-day Shaanxi ). After warring with the Lý dynasty of Vietnam from 1075 to 1077, Song and Lý made a peace agreement in 1082 to exchange the respective lands they had captured from each other during the war. Long before the Tang and Song dynasties,
16250-448: Was an online savings brand owned and operated by Kaupthing Bank and its subsidiaries from 2007 to 2008. It offered savings accounts only to personal savers and operated in ten countries. One major difference between Kaupthing Edge and Icesave was that Kaupthing Edge accounts were usually held not with branches but with subsidiaries. This means responsibility for regulation of the subsidiaries and provision of deposit guarantees rested with
16380-440: Was delegated to. Strict standards developed for ambassadors, requiring they have large residences, host lavish parties, and play an important role in the court life of their host nation. In Rome, the most prized posting for a Catholic ambassador, the French and Spanish representatives would have a retinue of up to a hundred. Even in smaller posts, ambassadors were very expensive. Smaller states would send and receive envoys , who were
16510-426: Was likely to be taken by certain persons who are the government of or resident of a country or territory outside the UK." UK Prime Minister Gordon Brown announced that the UK government would launch legal action against Iceland. The British Treasury and FSA proceeded to freeze an estimated ISK 690.4bn (€4.0bn) worth of British assets of Landsbanki branches in Britain. Concerning Kaupthing and its British subsidiaries,
16640-597: Was the first event where Iceland's problems with its banking sector was discussed at the highest level. On 2 September 2008, the British Chancellor of the Exchequer , Alistair Darling , had met with Icelandic Minister of Trade , Björgvin G. Sigurðsson , to discuss how the recently increased financial problems for Icelandic-owned banks operating in the UK should be handled. It was later claimed by Björgólfur Thor Björgólfsson , son of Landsbanki's chairman of
16770-466: Was the first negotiated loan agreement, attempting to define the repayment terms for these two loans. It was enacted on 2 September 2009 but was not accepted by the governments of the UK and Netherlands, due to a unilaterally attached term added by the Icelandic parliament which limited Iceland's repayment guarantee only to 2024, with automatic cancellation of any potential owing still existing beyond this year. Instead, UK and Netherlands then counter proposed
16900-596: Was to ensure foreign envoys were properly cared for and received sufficient state funds for their maintenance, and it kept all the official translators—it clearly had a security function as well. On Strategy , from the 6th century, offers advice about foreign embassies: "[Envoys] who are sent to us should be received honorably and generously, for everyone holds envoys in high esteem. Their attendants, however, should be kept under surveillance to keep them from obtaining any information by asking questions of our people." In Europe, early modern diplomacy's origins are often traced to
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