Iceland President: We Decided to Let the Banks Fail

Iceland President Olafur Ragnar Grimsson on the recovery of the country’s economy

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Olafur Ragnar Grimsson Iceland president ‘Let banks go bankrupt’

Iceland President Olafur Ragnar Grimsson tells Al Jazeera’s Stephen Cole that Europe should let banks that are ran “irresponsibly” go bankrupt. Speaking at the annual World Economic Forum in Davos, Grimsson also held his country as a model of economic recovery after its near-collapse four years ago. “We didn’t follow the traditional prevailing orthodoxies. And the end result four years later is that Iceland is enjoying progress and recovery.”

 

Previously: Iceland Did It Right … And Everyone Else Is Doing It Wrong

 

Category: Bailouts, Video

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5 Responses to “Iceland: Here’s How You Deal with a Bank Crisis”

  1. pauldoesntknow says:

    There’s a comment made by President Grimsson at the end of the second video where he correlates a strong financial sector with a weakening of other areas of the economy (technology especially). If high finance takes the best and brightest mathematicians, academics, and technology workers, then other areas that compete for these resources either pay much more for them or go without. In the US, Google, Facebook, and others like them can obviously compete on pay, but many other companies may have underperformed because of the lure of finance industry payouts. Interesting idea that Icelandic GDP may have experienced some level of growth over the last 4 years because fewer “useful” workers were employed by (or interested in) the financial sector and moved to other areas instead.

  2. StudsTerkel says:

    http://studiotendra.com/2012/12/29/what-is-actually-going-on-in-iceland/

    Kind of surprised to see these videos, since I discovered the link above from BR’s daily reads a few weeks back. Don’t get me wrong, anything that’s helpful to fix the mess we have in the US and around the world is welcome. But the Icelandic story is not so clear and happy as Pres. Grimsson makes it out to be.

  3. [...] been solved, that is, except Iceland. Which is doing brilliantly by doing everything completely different from what they were told. Go Björk. Should tell us something [...]

  4. Let us be clear on the consequences of rogue nations who want to repudiate debt. The icelandic krona: USDollar exchange rate plunged from 60:1 in Dec2007 to 145:1 in the six months following their misguided actions. It is 125today. 1/2 its former value. Argentina faced similar debasement and niether can borrow a dime on the bond markets. Iceland remains in IMF care.

  5. [...] Iceland: Here’s How You Deal with a Bank Crisis (ritholtz.com) [...]