And perpetuated the system. Iceland meanwhile let their banks fail,sent bankers to jail, took the medicine and came out stronger.
And perpetuated the system. Iceland meanwhile let their banks fail,sent bankers to jail, took the medicine and came out stronger.
Icelander here. The banks were only temporarily nationalized, the plan was always to privatize them as soon as possible. Only a handful of bankers went to jail, their sentences were extremely light, and every single one of them returned to investing as soon as they were able (or even kept investing via family members while in prison). Today they are still the richest people in Iceland and own the majority of all assets.
I think the only reason Iceland nationalized the failed banks in the first place was because they had no other option, the economy is too small, and they simply could not afford to bail them out, the money literally did not exist.
Also, today’s Iceland is extremely troubled by austerity. Schools and healthcare is extremely underfunded. Teachers- and nurses strike almost every 2 years. The city of Reykjavík just started their biggest round of mass-layoff ever.
Well the US nominally put in more safeguards against the same thing happening again. We've just dismantled them in record time and are moving on to those put in place after the 20s for some reason.
Iceland isn’t a global financial powerhouse and it has a low population. My county has twice as many people as Iceland, the city I live in has as many residents as Iceland has citizens.
Wild guess: I suppose in Iceland the banks weren’t buying the politicians.
They were. Or rather they were all friends/family/the same people. Iceland is one of the most corrupt countries in Northern Europe. What happened is due to how small the economy is, the country simply could not afford to bail out the banks. The money required to do so simply did not exist, so they had exactly one option.
Note also that since then, all the nationalized banks are back on the public market with the state only holding plurality or even minority shares. Investment/retirement funds and private investors together hold bigger share then the state. These shares were more often then not released on a steep discount allowing investors (many of whom responsible for the 2008 crash) essentially free money from the state.