Iceland’s borrowing in international credit markets during the period 2003-2007 propelled a macroeconomic expansion as well as the very rapid expansion of the banking sector.1 Borrowing was also undertaken to fund leveraged buy-outs of foreign companies as well as the buying of domestic assets.
Iceland faces the music
Gylfi Zoega, 27 November 2008
Iceland: The future is in the EU
Philip Lane, 6 November 2008
Iceland is undergoing a traumatic financial crisis. In just a few weeks, it has seen the collapse of its currency and its banking system, plus a spectacular decline in its international reputation and its diplomatic relations with long-standing international partners.
The collapse of Iceland’s banks: the predictable end of a non-viable business model
Willem Buiter, Anne Sibert, 30 October 2008
Early in 2008 we were asked by the Icelandic bank Landsbanki (now in receivership) to write a paper on the causes of the financial problems faced by Iceland and its banks, and on the available policy options for the banks and the Icelandic authorities.
We sent the paper to the bank towards the end of April 2008; it was titled:
- Secular stagnation: Facts, causes, and cures – a new Vox eBookTeulings, Baldwin
- Can large primary surpluses solve Europe’s debt problem?Eichengreen, Panizza
- The unrecognised benefits of grade inflationBoleslavsky, Cotton
- The US manufacturing base is surprisingly strongMoran, Oldenski
- Long-term damage of the US court’s Argentinian debt rulingFrankel
- A tale of two depressions: What do the new data tell us? February 2010 updateEichengreen, O’Rourke
- Educated in America: College graduates and high school dropoutsHeckman, LaFontaine
- Eurozone breakup would trigger the mother of all financial crisesEichengreen
- Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji
- Debt, deleveraging, and the liquidity trap: A new modelKrugman