On 22 April 2010 the board of directors of Byr Savings Bank submitted a request to the Financial Supervisory Authority (FME) for it to take over the operations of the Bank.
It was after the CAD ratio had been under required limits for some time and negotiations with creditors had proved unsuccessful.
On 23 April 2010 the FME took control of the Bank. It took over the power of meeting of guarantee capital holders, dismissed the board of directors and transferred all assets and operations to a new bank, Byr hf. (tax no. 620410-0200), owned by the Icelandic government.
It also formed an Interim Board for the old bank, Byr Savings Bank (tax no. 610269-2229), which took over the responsibilities of its board of directors.
Under Interim Provision VI of Act no. 161/2002 on Financial Undertakings and Interim Provision IV of Act no. 44/2009, the FME is authorized to take special measures in view of exceptional circumstances to limit damage or the risk of damage in the financial markets. If it is the assessment of the FME that circumstances require urgent action, the FME may assume the powers of meetings of guarantee capital owners for the purpose of making decisions on necessary measures, including decisions to restrict the powers of the board of directors, dismiss the board of directors in part or in full and appoint a provisional board of directors, take over the assets, rights and obligations of a financial undertaking in part or in full, or dispose of such undertaking in part or in full. The last measure may include the merger of an undertaking with another financial undertaking.