Meltdown Iceland: Lessons on the World Financial Crisis from a Small Bankrupt Island

Meltdown Iceland: Lessons on the World Financial Crisis from a Small Bankrupt Island

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by Roger Boyes
     
 

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The economic crisis that emerged in America in 2008 unleashed a veritable epidemic of ill health around the world. However it was Iceland, whose population of three hundred thousand had the worlds highest GDP per capita and counted itself the happiest of countries, that caught the worst cold. It has nearly killed them.
No story from the economic crisis of 2008 is…  See more details below

Overview

The economic crisis that emerged in America in 2008 unleashed a veritable epidemic of ill health around the world. However it was Iceland, whose population of three hundred thousand had the worlds highest GDP per capita and counted itself the happiest of countries, that caught the worst cold. It has nearly killed them.
No story from the economic crisis of 2008 is more evocative than I celands. The names may be unfamiliar-Johanesson, Bjoergolfsson, Oddsson-but their exuberance, greed, and miscalculation have many counterparts on our shores. And however traumatic the collapse of individual companies may be in the United States, in Icelands case an entire country melted down. All the wealth accumulated in the previous decade-during which a new breed of Icelanders had dared to believe they could compete economically on an international level, during which Reykjavik became the Capital of Cool-disappeared practically overnight. Icelands story shows how closely the world economy is interconnected: The default on subprime mortgages in the U .S. led to the collapse of Lehman Brothers, which led directly to the run on Icelands banks, which forced local authorities in Britain to switch off the heating in their classrooms.
With panache and color, Roger Boyes tells the inside story of the bankrupting of I celand: how it happened, the human dramas-from politicians to financiers to fishermen-that continue to swirl around it, and the lessons we can not ignore. Published on the first anniversary of its collapse, Meltdown Iceland is a cautionary tale for our times, an authoritative and compelling account of the financial destruction of a tiny country whose saga should resonate for us all.

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Editorial Reviews

Library Journal
British correspondent Boyes, a veteran when it comes to covering Iceland and its 300,000 citizens, recounts how the country's financial saga began in the 1990s with the privatization of banks and a series of accommodative government policies. The result, he says, was a cascading spiral of borrowing on easy terms by Iceland's businesses and individuals. When the 2007 credit contraction began, Iceland's highly leveraged borrowers could not meet their obligations. The ensuing threat of a national default was averted only by the International Monetary Fund's intervention. Boyes goes beyond the financial crisis to explain the country's social structure, cultural outlook, and political and business hierarchy. While he brings a measure of clarity to what happened globally by focusing on the economic microcosm that is Iceland, the book does bog down at times in his descriptions of local politics and feuds. Although he writes clearly and avoids economic jargon, inevitably there are tongue-twisting Icelandic names like Bjoergolfur Gudmunson and Thorgerdur Katrin Gunnarsdottir. VERDICT For anyone interested in Iceland, Boyes's work is absolutely essential. For those needing material on the global nature of the credit crisis, this is a great supplementary source.—Lawrence Maxted, Gannon Univ. Lib., Erie, PA
Kirkus Reviews
Avarice, incompetence, feuding, lying, revenge-seeking: The financial collapse of Iceland in October 2008, writes Financial Times correspondent Boyes, has all the makings of a Viking saga. Iceland had been riding high, having deregulated its banking industry in a moment of Thatcherite/Reaganite free marketeering. Though a nation with a population approximately the size of a small Midwestern city, Iceland had almost nothing else but commodities speculation going for it. But that speculation brought vast sums to the newly privatized banks, far more than the country's gross domestic product. As usually happens, bust followed boom. Some 30 players, "the core of the country's decision-making elite," made very bad decisions in a time when the rest of the world was falling into an economic tailspin. The sudden bankruptcy of Iceland, Boyes notes, had a radicalizing effect in an otherwise quiet political scene, with demonstrations that would have been the equivalent, in the United States, of a few million angry people taking to the streets. First the islanders threw eggs at the guilty party. When eggs became too expensive, they switched to shoes, bringing the specter of George W. Bush into the mess. In time, the anger transformed into denial, acceptance and the other stages of reckoning with death, in this case the death of a small but independent economy. Boyes includes plenty of human-interest stories, but the narrative will be most interesting to students of globalism, who will find object lessons in the spectacle of a nation's being forced into bankruptcy thanks to the greed and malfeasance of a few well-placed, well-connected individuals. As to whether Iceland be brought back from theeconomic grave, Boyes ventures that it is possible-but with more, rather than less, regulation of the sort that will increasingly be required to save capitalism from itself in other economies well beyond the island. A valuable adjunct to the small but growing literature surrounding the current economic crisis. Agent: Natasha Fairweather/AP Watt
From the Publisher

“British correspondent Boyes, a veteran when it comes to covering Iceland and its 300,000 citizens, recounts how the country's financial saga began in the 1990s with the privatization of banks and a series of accommodative government policies... Boyes goes beyond the financial crisis to explain the country's social structure, cultural outlook, and political and business hierarchy... For anyone interested in Iceland, Boyes's work is absolutely essential. For those needing material on the global nature of the credit crisis, this is a great supplementary source.” —Library Journal

“How did the tiny, remote island nation of Iceland become a casualty of the global financial crisis? Boyes, correspondent for the Financial Times and the Times of London, has been reporting from Iceland since he was sent on his first assignment to cover the "Cod War" in 1976. In Iceland, as elsewhere, the seeds of destruction were planted 25 years earlier with the privatization and deregulation of the Reagan-Thatcher years... When it all fell apart during the global financial crisis, Icelandic banks collapsed, bankrupting the entire nation. Boyes follows the saga involving a mere handful of bankers and politicians, but the story becomes a microcosm of the situation facing the world at large.” —Booklist

“A valuable adjunct to the small but growing literature surrounding the current economic crisis.” —Kirkus Reviews

“An energetic exploration of lessons to be drawn from a statelet that skidded toward bankruptcy a year ago this month.” —Bloomberg.com

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Product Details

ISBN-13:
9781608191987
Publisher:
Bloomsbury USA
Publication date:
10/06/2009
Sold by:
Barnes & Noble
Format:
NOOK Book
Pages:
256
File size:
788 KB

Meet the Author

Roger Boyes is an awardwinning correspondent, having covered Western and Eastern Europe for the past thirty years for the Financial Times and the Times of London. He has been reporting from Iceland since he was sent on his first foreign assignment to cover the Cod War in 1976. He lives in Berlin.
Roger Boyes is an awardwinning correspondent, having covered Western and Eastern Europe for the past thirty years for the Financial Times and the Times of London. He has been reporting from Iceland since he was sent on his first foreign assignment to cover the Cod War in 1976. He lives in Berlin.

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