Minister “ill-suited” to decide on bank matters

Kristina Háfoss, the Minister of Finance is currently preparing a recommendation on SIFI classification of Faroese banks for Danish authorities to consider.

A systemically important financial institution (SIFI) is a bank, insurance company or other financial institution which cannot go bankrupt and whose failure might trigger a financial crisis.

It appears likely that Norðoya Sparikassi will avoid being classified as a SIFI bank.

As reported yesterday, this is good news for the Norðoya Sparikassi management, as it means significantly less performance pressure on the bank.

Unfit to make decisions

However, the bank’s committee chairman, John Danielsen, is the father of Kristina Háfoss, and that is a problem, says lawyer Kristina Samuelsen.

She cites a clause in the law that says:

“A person deemed to be disqualified or incompetent must not make decisions, contribute to decisions or in participate in other ways in the decision-making process.”

According to this definition, she argues, there is no doubt that the finance minister is ill-suited to make decisions on this matter.

A minister serves all citizens

But Háfoss has replied that as finance minister, she administers legislation that applies to every single citizen in the country, and that includes her own family members – a situation that any other minister finds themselves in.

“The bank’s management has its own objectives. My overall objective is to ensure that our banking sector remains strong and solid.”

The ultimate decision on a minister’s legal capacity in any given matter lies with the Prime Minister. Translated by prosa.fo