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Global Economies, Regulatory Failure, And Loose Money: Lessons For Regulating The Finance Sector From Iceland's Financial Crisis, Birgir T. Petursson, Andrew P. Morriss

Andrew P. Morriss

Iceland was the first developed economy to fall into crisis in 2008, with the collapse of its banking sector, currency value, and economy. The collapse threw Iceland into a political crisis and provoked a serious international dispute between Iceland and Britain and the Netherlands over responsibility for the failed banks. Prior to 2008, Iceland had been treated as the poster child for deregulation; since 2008, it has been held up as the poster child for the dangers offinancial liberalization. Neither is accurate. Rather, Iceland presents a cautionary tale about the interrelationships between fiscal and monetary policy and regulatory measures. Excessive …