A special court in Iceland on Monday convicted former prime minister Geir Haarde [official profile, in Icelandic] on one out of the four criminal charges he faced concerning the collapse [JURIST news archive] of the country's banking system in 2008, announcing that he would not face any punishment. The charges stemmed from the collapse of the country's three major banks in 2008 while Haarde was leader of the country's ruling Independence Party. Haarde was convicted [AP report] of failing to take the steps to be sure a comprehensive analysis of the risk the state faced after the collapse of the banking system was completed. Haarde dismissed his conviction as a formality and talked about possibly appealing his conviction to the European Court of Human Rights (ECHR) [official website]. The court found Haarde not guilty of the other three charges relating to his alleged negligence relating to the financial crisis. The court also determined that the state would pay the cost for Haarde's defense lawyers. The special court, known as the Landsdomur, was established in 1905 to prosecute Cabinet officials.
Haarde's trial resumed in March after originally opening in September [JURIST reports] with Haarde's lawyers moving to dismiss all of the charges against him, a request which was denied. Haarde pleaded not guilty [JURIST report] in June, vowing to fight the charges and claiming they were the result of politics. In September 2010, the Icelandic Parliament referred charges to the Landsdomur after the Special Investigation Committee (SIC) released a "Truth Report" claiming that seven Icelandic government officials acted with gross negligence in their management of the country's financial system prior to a 2008 bank collapse. The SIC determined that Haarde and former central bank head David Oddsson knew that banks were assuming overseas debt but took no action to prevent or mitigate the effects of the accumulation.