What caused the Icelandic banking crisis?
Wholesale funding disappeared in September 2008 leading to the collapse of Glitnir, Kaupthing and Landsbanki. Due to the size of the combined balance sheet of those banks the government of Iceland did not have the means to save those banks. They were put into receivership instead with their boards replaced.
Did Iceland imprison bankers?
All of the criminal cases are linked to the notorious crash of the Icelandic banking system in 2008. Eleven of those bankers, who are former employers of Kaupþing, were sentenced to total 35 years in prison, while other seven individuals from Glitnir HoldCo. were sentenced to 25 years.
Was Iceland facing a classic currency crisis or was this a banking crisis?
Iceland was not facing a classic currency crisis. The crisis was a banking crisis where the management of the banks recklessly expanded business by raising short term loans which were easily available at that time.
What did Iceland do when their banks failed?
“After the three biggest banks failed, the Financial Supervisory Authority took them over and put in Resolution Committees. These were obligated to have auditors go through the books and return a report to the Supervisory Authority. They were obligated to give us information of anything suspicious.
How much is Iceland’s debt?
In 2020 Iceland public debt was 14,660 million euros16,744 million dollars, has decreased 306 million since 2019….National debt fell in Iceland.
| Date | Debt ($M) |
|---|---|
| 2018 | 16,588 |
| 2019 | 16,438 |
| 2020 | 16,744 |
How big was the financial crisis in Iceland?
Kaupthing Bank, Landsbanki, and Glitnir Bank had defaulted on $62 billion of foreign debt, according to Thomson Reuters data. 8 9 The banks’ collapse sent foreign investors out of Iceland. That sent the krona down 50 percent in one week. 10 The stock market fell 95 percent. 11 Almost every business in Iceland went bankrupt.
How big was the banking sector in Iceland?
Thus, in 2008, on the eve of the banking crisis, the three larg- est Icelandic banks’ combined assets were about nine times Iceland’s GDP, or $155 billion (€115 billion). This was the largest banking sector relative to GDP of any country in the world.
How did the Icelandic banking crisis affect the stock market?
Prices on the stock market took a dip as did the value of collateral. Icelandic firms faced margin calls from their foreign lenders. They were required to provide more collateral, in the form of securities issued by the banks, which they successfully obtained.
Who was the special prosecutor for the Icelandic bank collapse?
Olafur Hauksson was a special prosecutor working on the collapsed bank cases in Iceland. They have brought 28 cases, with more than 60 prosecutions. “It’s been quite time-consuming: in one of the biggest cases we have 22,000 pages.