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Ireland And Iceland In Crisis D: Similarities And Differences, Arwin G. Zeissler, Daisuke Ikeda, Andrew Metrick

Journal of Financial Crises

On September 29, 2008—two weeks after the collapse of Lehman Brothers—the government of Ireland took the bold step of guaranteeing almost all liabilities of the country’s major banks. The total amount guaranteed by the government was more than double Ireland’s gross domestic product, but none of the banks were immediately nationalized. The Icelandic banking system also collapsed in 2008, just one week after the Irish government issued its comprehensive guarantee. In contrast to the Irish response, the Icelandic government did not guarantee all bank debt. Instead, the Icelandic government controversially split each of the three major banks into a new …