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Iceland's meltdown: the rise and fall of international banking in the North Atlantic

Wade, Robert Hunter and Sigurgeirsdottir, Silla (2011) Iceland's meltdown: the rise and fall of international banking in the North Atlantic. Brazilian Journal of Political Economy, 31 (5). pp. 684-697. ISSN 0101-3157

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Identification Number: 10.1590/S0101-31572011000500001


This paper shows how rapid privatization and liberalization of Iceland's small local banks around 2000, combined with well-developed crony relations among the elite, enabled a small group of financiers to leverage government-guaranteed deposits into a vast wave of mergers and acquisitions abroad, and redistribute enough of the profits back home to make the economy boom. Negative policy feedback loops were systematically undermined. The incoming left-wing government, with IMF support, has managed to protect the bulk of the population from the worst of the effects.

Item Type: Article
Official URL:
Additional Information: © 2011 Centro de Economia Política; Creative Commons Attribution-NonCommercial 3.0 Unported (CC BY-NC 3.0)
Divisions: International Development
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HG Finance
JEL classification: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit
Date Deposited: 28 Jun 2012 10:36
Last Modified: 16 May 2024 01:20

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