Friday, August 09, 2013

Such Wisdom

Being a relatively small population, the people of Iceland are not only up on their current events, they are engaged.  While driving us along, our South Coast tour guide Helke candidly told us about the 2008 Icelandic bank failure that occurred when, he said, the banks were privatized to make them “more efficient”.  From a February 2013 Forbes article:  

Instead of allowing the criminals responsible for bank fraud to run free as the years passed by, Iceland thought it might be wise to actually indict bankers who committed serious financial crimes that contributed to the collapse. By paying off loans for consumers, forgiving homeowner debt (up to 110% of the property value), and throwing the offenders in prison, Iceland was able to bounce back. Now, its economy is “recovered” and is growing faster than both the US and European economies.

Their president’s comment, as quoted by Forbes:

"Why are the banks considered to be the holy churches of the modern economy?  Why are private banks not like airlines and telecommunication companies and allowed to go bankrupt if they have been run in an irresponsible way? The theory that you have to bail out banks is a theory that you allow bankers enjoy for their own profit, their success, and then let ordinary people bear their failure through taxes and austerity. 
People in enlightened democracies are not going to accept that in the long run.”

Such wisdom.

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