Iceland and the bond markets

zero_hope

Iceland made a successful return to the bond markets earlier this year. They were able to let their banks go down the toilet and still recover. Why would not Ireland be able to do the same? Iceland shows us how a banking crisis should be handled. Ireland is the most shocking example of what not to do when you have a banking crisis. Mods can move this thread if you feel that it's not in the correct forum.

View

zero_hope wrote: »

Iceland made a successful return to the bond markets earlier this year. They were able to let their banks go down the toilet and still recover. Why would not Ireland be able to do the same? Iceland shows us how a banking crisis should be handled. Ireland is the most shocking example of what not to do when you have a banking crisis.

Iceland, if I recall correctly, basically had a balanced (government) budget when it let its banks go bust. As such, Iceland didn't need to borrow when it did so, so could "afford" to remain outside the bond markets at the time.

By way of contrast, we were, and are, borrowing 2 Euro out of every 5 Euro we are spending (i.e our taxes only cover 3 Euro out of every 5 we are spending). Hence, our government choose not to go down the "let the banks go bust and see what happens" road. They could have, of course, but had they then needed to make massive closures of hospitals, schools etc as a result, I doubt the public would have been much happier than they are currently.

Iceland incidentally are being sued in the EEA court over the way the handled their banking crisis and should they lose, their solution at the time may well turn out to be dearer than it currently seems.

dsmythy

What happened to Icelandic welfare, work conditions, public pay?

zero_hope

View wrote: »

Iceland, if I recall correctly, basically had a balanced (government) budget when it let its banks go bust. As such, Iceland didn't need to borrow when it did so, so could "afford" to remain outside the bond markets at the time.

By way of contrast, we were, and are, borrowing 2 Euro out of every 5 Euro we are spending (i.e our taxes only cover 3 Euro out of every 5 we are spending). Hence, our government choose not to go down the "let the banks go bust and see what happens" road. They could have, of course, but had they then needed to make massive closures of hospitals, schools etc as a result, I doubt the public would have been much happier than they are currently.

Iceland incidentally are being sued in the EEA court over the way the handled their banking crisis and should they lose, their solution at the time may well turn out to be dearer than it currently seems.

Even if they lose I'm pretty sure that Iceland will refuse to pay, because unlike other countries that begin with an I Iceland is a truly sovreign country that does not bend over backwards for bankers

Maura74

Unlike Ireland, UK, Greece and other pigs countries some of the bankers that allowed the country to get into such a state are in jail.

edanto

Interesting. Do you know what crimes they were found guilty of?

Maura74

Heard it on BBC but can only find these links in relation to Ice News

http://www.icenews.is/index.php/2011/04/07/first-iceland-bank-crash-prison-sentence-handed-down/


http://www.icenews.is/index.php/2011/01/20/more-icelandic-bankers-arrested/


http://www.icenews.is/index.php/2011/01/20/more-icelandic-bankers-arrested/


http://www.guardian.co.uk/business/2011/jun/07/iceland-former-premier-trial-banking-crisis

Dirk Gently

View wrote: »

Iceland incidentally are being sued in the EEA court over the way the handled their banking crisis and should they lose, their solution at the time may well turn out to be dearer than it currently seems.

What specifically is the charge? I know the UK and Holland reimbursed their own citizens when the icelandic banks collapsed but is it not essentially a private matter and not a sovereign one?