Last month, rumors flew that Iceland might relax its six-year-old capital controls for the low, low price of a 35% exit tax. This did not sit well with creditors of the banks whose bailout led to the capital controls in the first place. After further careful consideration, Iceland has decided that maybe it doesn’t really care how it sits with them.
Representatives from Iceland’s government, central bank and parliament discussed imposing a tax as high as 40 percent on investors exiting the island, according to two people close to the talks….
The discussions took place yesterday, on the eve of scheduled talks with creditors in Iceland’s failed banks. To enable a settlement, Iceland must scale back capital controls that have been protecting the krona since the country’s biggest banks defaulted on $85 billion six years ago.