Vignettes XII

In the year 1982, Ármann Reynisson returned to Iceland from London where he had been engaged in business studies. He founded a brokerage which he called Ávöxtun (“Interest”) in what was then an underdeveloped financial system that not only years behind other western countries but also hostile to any change or innovation. Ávöxtun turned a new leaf in the history of commerce in Iceland, especially in the area of interest accounts and private investment. In Vignettes XII, the author speaks with candour and control about of this turbulent period of his life in 43 individual stories. He guides the reader through from the foundation of the Ávöxtun company to the height of its success. He also provides glimpses of the social life of the period, an area in which he was no less innovative. In a darker vein, the author shows how his company was notoriously singled out and bullied from the very outset and how, for many years after its fall, he was subject to persistent attempts to besmirch his character.


Commerce in fetters

At the beginning of the eighties, commerce was in the firm grasp of the two major powers. On the one hand there was Eimskip, whose influence was predominantly in the capital city; on the other hand, there was Sambandið, whose control was more in the country. These two stood head and shoulders above all other companies and used their monopoly status unsparingly to shake off any competition. Each had a basis in the two most powerful political parties in the country. This gave them direct access to loans from government banks and at a rate of interest so advantageous that by the time they were repaid raging inflation had reduced them considerably. These two powers blocks were treated each other with respect in the public arena but kept their distance. Within this framework, each party’s favourites were promoted to key positions, more often according to their opinions than to their expertise.

The bank manager´s waiting room

On the top floor of the Central Bank is the “Holy of Holies,” the office of the bank manager and a waiting room for those who have an appointment to meet him. The furniture and furnishings are the best money can buy but nevertheless lumbering; the floor is richly carpeted from wall to wall. The walls are adorned with landscapes to delight the eye of those who sit and wait for an “audience,” usually formerly dressed and rather grave because the welfare of each of them is in the hands of the bank manager. In one corner, sits an arrogant usher who wrote the names of all who arrived. He watches all of them very closely, most of whom have been waiting for quite some time. People used to begin to gather outside the bank in all weathers, sometimes before the main doors were opened at nine o’clock each morning. Then they took their seats in the waiting room although no one was admitted to see the manager before at least ten o’clock; sometimes it took as long as lunchtime to see him.

The events leading up ot The founding of Ávöxtun

Financial life in Iceland used to be a little like that of a remote town without proper road communications to the outside world. The government held all the strings of its banks via their governors, most of whom were ex-politicians. In addition, there was a host of old-fashioned savings banks, all with party political connections, that did their bit for the small customer, as far as that went. In private commerce, the “Octopus” stood behind many of the companies in the country with Eimskip at the helm, lording it over all and granting favours via political fraternity. The other power block, Sambandið, a kingdom within a kingdom, was an association of farmers who ran industrial and service companies for in the agricultural sector as well as a powerful imports, banking and insurance interests. The same spider’s web lay across the entire political system, full of opportunists who usually had little regard for the abilities or skills of the civil service. And a centuries’ old subservience to the powers-that-be was common.

An innovation in social life in the city

The party arouses a good deal of attention and the guests are eager to talk about it and the experience of meeting such a wide array of people and not least to talk about the host, who does things in a slightly different way than has been common hitherto. With this celebration, Ármann introduces new customs and new emphases to the social life of the city.

The young chairman

When he finally returns to Iceland, Ármann has become an adult. But a lack of life experience and a sense that the world is a dangerous place hold him back. He does not fully realise that the path of existence is a slippery one and that not everyone is amicable. People do not like it when one of their number ascends higher up the social ladder and enjoys the limelight, and least of all when the person in question is their equal in years. In addition, society takes a dim view of the man who does not marry but who is agile and free like a Siamese cat. And trying to implement innovations in a land where the financial sector is underdeveloped is simply asking for trouble. The young man pays little heed to warnings that he receives from more experienced parties and does not tread carefully enough. He is bold and plucky in a society still burdened by subservience towards the narrow-minded powers-that-be, always ready to take a fighting stance when he is subjected to insult.

Ávöxtun´s peak

After three years of continuous development by the young chairman, wheels had begun to turn very fast and the moment had come to restructure operations. At about the same time as the US president, Ronald Regan and the General Secretary of the Soviet Communist Party, Mikhail Gorbachev met for peace talks in Reykjavik in the autumn of 1986, Ávöxtun had taken over a whole floor on Laugavegur. It now comprised four offices, a meeting room, and an open area spacious enough to accomodate a staff of four as well as a waiting room/reception area. The decor, the basics of which were designed by the young chairman, were simple but tasteful and the walls hung with contemporary artworks.

The assault on Ávöxtun

In the spring of 1986 the head of the Bank Inspectorate led a public attack on the Ávöxtun brokerage – as well as conducting a few choice covert strikes. He sent the public prosecutor a letter in which he accused the company of breaking the law, but a long time passed and no action was taken by the prosecutor’s office. A copy of the letter was then sent to all the nation’s leading media so that they could report the matter in their usual sensational style. Predictably enough, the news desk of the National Broadcasting Company, the most influential medium in the land, gave it headline status but hardly had anything to say about what the company actually does.

Ávöxtun´s fifth anniversary

Towards the end of the celebrations, Ármann Reynisson held a speech which was well received. Shortly afterwards, his father fainted, falling hard on to the wooden floor, and an ambulance had to be called. Ármann’s closest relatives ended the evening with good wine and delicious tidbits at his home on Smáragata. In the middle of all this, his father arrived, fit as a fiddle, and he was greeted with great relief and affection. It sunk in later that no company had ever held a more splendid wake.

Black Monday

Ávöxtun had had to steer itself through troubled waters and was now careening dangerously. The blow hit an artery and the blood was flowing copiously. The strain on the young chairman was overwhelming and he had a severe headache that lasted for some considerable time. His working day grew longer and he tried to do all he could to keep the situation under control.


When Ármann saw what lay in store he took the case into his own hands and decided to go on a hunger strike and force his own demise if the matter was not solved within three days. The prisoner howled at all those people who had to tried to change his mind and was determined to stand up for his rights. This latest piece of treachery was more than his parents could manage after standing by him night and day throughout the whole ordeal.They began to suffer a decline in health, long weary of the spite and malice that was levelled at their son. The director of the ministry was disgusted with the whole matter. Twenty-four hours later, he directed that Ármann receive a “release order,” which neither he nor parents actually managed to read because they were too overcome with emotion. The warden at Kvíabryggja regarded this as the messiest end ever to a prisoner’s term at the institution. Ármann was sent back home under the cover of night.


The attack on Ármann at Ávöxtun was almost over. The many spectators at the gladiator’s ring, who have bullied the chairman and his company in one way or another for more than a decade, have completely failed to break his spirit or his human dignity. Ármann Reynisson allows none of this to belittle him.

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