Bringing Down the Banking System : Lessons from Iceland

The combined collapse of Icelands three largest banks in 2008 is the third largest bankruptcy in history and the largest banking system collapse suffered by any country in modern economic history, relative to GDP. How could tiny Iceland build a banking system in less than a decade that proportionally exceeded Switzerlands? Why did the bankers decide to grow the system so fast? How did businesses tunnel money out of the banking system? And why didnt anybody stop them? Bringing Down the Banking System answers these questions. Gudrun Johnsen, Senior Researcher with Icelands Special Investigation Commission, tells the riveting story of the rise and fall of the Icelandic banking system, describes the Commissions findings on the damaging effects of holding company cross-ownership, and explains what we can learn from it all.