Why Iceland?: How One of the World's Smallest Countries Became the Meltdown's Biggest Casualty

by Ásgeir Jónsson

As late as the mid 1980s, Iceland’s economy revolved around little else than a semi-robust cod-fishing industry. By the end of the century, however, it had transformed itself into a major player in world finance, building an international banking empire worth twelve times its GDP. The tiny island nation of 300,000 was one of the global economy’s great success stories. And then everything came crashing down. Why Iceland? is the inside account of one of the economic meltdown’s most fascinating and far-reaching tragedies. As Chief Economist of Kaupthing Bank, the country’s largest bank before the collapse, Ásgeir Jónsson is perfectly suited to examine Iceland’s collapse in painstaking detail. He witnessed behind-the-scenes events firsthand, such as an intriguing meeting in January 2008 when a group of international hedge fund managers gathered in a bar in Reykjavik to discuss Iceland’s economy―an informal affair that eventually became the center of a criminal investigation by the country’s Financial Supervisory Authority. This inside account examines the pressing issues behind history’s biggest banking collapse:

Genres: Nonfiction, Finance, Business

224 pages, Hardcover

First published July 9, 2009

Reviews

[Jökull Auðunsson · Rating 2 out of 5]

Good for the history

Ásgeir Jónsson wrote this in the aftermath of the worst of the financial collapse in Iceland. He worked for Kaupþing as the head analyst. He has since worked in the academic world. He’s known for his orthodox economics at the University of Iceland. You can see some evidence here that he (at least in 2009) buys into the money multiplier theory and such. His english is strangely grandiose at times, but the text reads well enough. A good piece of historical record before bankers were hunted down in a political frenzy.

[David · Rating 4 out of 5]

great book about the inside scope of how Iceland rises and falls..(present continuous term)...Norse tribe with much distrust towards the outsiders: Danes, British and Inuit...It has experienced the banking revolution like no others...high interest that attracts FDI, yet QE at the same time for "reckless" expansion with high value Krona..real estate was not a problem, but massive investment in stock market..with little extra "help" from the Brits who simply put a nail in Iceland CBI..but again, Iceland has risen by kicking out and locking people up for what they had done...reforming their government like no others..100% democratic Western world have to learn from the Norse descendants: USA, Britain, France...If my Central Bank screwed up my hard earned money, do I have the right to use my way to override my so called representatively democratically elected government..You bet we CAN..This is not anarchy, but TRUE reform!

[Ajay · Rating 5 out of 5]

An interesting inside look into the story of Iceland, its economic and banking developments in the 19th century, and how these happenings created the conditions for the unlikely events surrounding this nation leading up to and during the financial crisis. Asgeir does an incredible job of connecting the dots between the rivalries and interesting characters of Europe and the resulting fall out.

[Peter Witfelt · Rating 3 out of 5]

Interesting look into the both the raw economics and the mentality behind the financial bubble, but also a shockingly un-selfconscious account from one of the drivers of the bubble, who seems quick to blame the politicians and central bankers for not stopping him from stepping on the gas.

[Lynn · Rating 3 out of 5]

I am not much of a financial wizard so much of this book is lost on me. Apparently Iceland got drunk on absorbing bad loans from other countries, especially the US and then suffered the consequences when the loans turned out badly. It changed its financial laws to accommodate the greed and then fell hard. Since then, Iceland has done better.

[Nez · Rating 2 out of 5]

If I understood the banking industry I am sure I would gave found this more interesting and probably have given this book 4 stars.