Iceland leads the way in financial crisis
Key Excerpts from Article on Website of Bloomberg/Businessweek
Posted: April 2nd, 2012
Icelanders who pelted parliament with rocks in 2009 demanding their leaders and bankers answer for the countrys economic and financial collapse are reaping the benefits of their anger. Since the end of 2008, the islands banks have forgiven loans equivalent to 13 percent of gross domestic product, easing the debt burdens of more than a quarter of the population, according to a report published this month by the Icelandic Financial Services Association. You could safely say that Iceland holds the world record in household debt relief, said Lars Christensen, chief emerging markets economist at Danske Bank A/S in Copenhagen. Iceland followed the textbook example of what is required in a crisis. Any economist would agree with that. Most polls now show Icelanders dont want to join the European Union, where the debt crisis is in its third year. The islands households were helped by an agreement between the government and the banks, which are still partly controlled by the state, to forgive debt exceeding 110 percent of home values. On top of that, a Supreme Court ruling in June 2010 found loans indexed to foreign currencies were illegal, meaning households no longer need to cover krona losses.
Note: The amazing story of the Icelandic people demanding bank reform is one of the most underreported stories in recent years. Why isn't this all over the news? To see what top journalists say about news censorship, click here. For blatant manipulations of the big banks reported in the major media, click here.