Iceland is often singled out as an example of a country that expertly handled its response to the 2008 financial crisis. After all, it punished more CEOs and politicians for their roles in the crash than any other country. But the story is far more complicated than it seems on the surface, as financial expert Jared Bibler explains in this insider account. Although white-collar criminal investigations don’t always make for exciting stories, Bibler does a first-rate job of crafting a dramatic, easy-to-follow narrative of events, making this a compelling read for anyone interested in understanding the legacy of 2008.
Iceland’s experience of the 2008 financial crash was uniquely dire.
The 2008 financial crisis was a global phenomenon, but few countries experienced it as Iceland did. The nation’s three largest private banks, which together constituted most of the value of Iceland’s stock market, failed. The first to fall was Glitnir, the weakest and smallest, on October 6, 2008; Landsbanki fell on October 7; and Kaupþing, the biggest Icelandic financial institution, declared bankruptcy on October 9, in a collapse that was 30% larger than Enron’s.
Legally mandated pensions for Icelandic citizens evaporated, and unemployment surged. The public reacted with fury, demanding new elections and the resignations of politicians during the “pots and pans revolution” of the winter of 2008–2009. Iceland’s economy eventually recovered, but only because the value of its currency nosedived, which made the nation an appealing destination for foreign tourists. For the average Icelandic citizen, however, this outcome came at a significant cost.
Historical and cultural factors contributed to Iceland’s economic...