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    Iceland Jails bankers and erases citizens’ debt.

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    Parliament....
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    Iceland Jails bankers and erases citizens’ debt.

    Post by Parliament.... on Sat 01 Dec 2012, 1:19 pm

    ( Note to Ivanhoe.....from Admin:

    When writing headings for threadstarts please try to keep the heading to one line and leave the introduction to the piece for first line in the actual post ).


    Icelanders who pelted parliament with rocks in 2009 demanding their leaders and bankers answer for the country’s economic and financial collapse are reaping the benefits of their anger.

    Since the end of 2008, the island’s banks have forgiven loans equivalent to 13 percent of gross domestic product, easing the debt burdens of more than a quarter of the population.

    The island’s steps to resurrect itself since 2008, when its banks defaulted on $85 billion, are proving effective. Iceland’s economy will this year outgrow the euro area and the developed world on average, the Organization for Economic Cooperation and Development estimates.

    Iceland’s approach to dealing with the meltdown has put the needs of its population ahead of the markets at every turn. Once it became clear back in October 2008 that the island’s banks were beyond saving, the government stepped in, ring-fenced the domestic accounts, and left international creditors in the lurch.

    The central bank imposed capital controls to halt the ensuing sell-off of the krona and new state-controlled banks were created from the remnants of the lenders that failed.

    Iceland’s special prosecutor has said it may indict as many as 90 people, while more than 200, including the former chief executives at the three biggest banks, face criminal charges. That compares with the U.S., where no top bank executives have faced criminal prosecution for their roles in the subprime mortgage meltdown. The Securities and Exchange Commission said last year it had sanctioned 39 senior officers for conduct related to the housing market meltdown.

    Your views please.

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    papa_umau
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    Re: Iceland Jails bankers and erases citizens’ debt.

    Post by papa_umau on Sat 01 Dec 2012, 1:54 pm

    While I believe that we have nothing to learn from the Icelandic government about how to regulate our banks, I do think that how that government dealt with the offenders in that banking system is something that we COULD learn from.

    When one realises how much damage was done to the nations that suffered from the banking scandal it is surprising that more of these reckless and criminal bankers did not get prosecuted and serve jail sentences for their parts in this scandal.

    Of course the banking regulations that Thatcher and Reagan destroyed just before this crash came about should never have been reduced at all as if they had still been in place we may have seen this destructive scandal being nipped in the bud long before it was allowed to do the damage that it did do.


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    Re: Iceland Jails bankers and erases citizens’ debt.

    Post by Parliament.... on Sat 01 Dec 2012, 2:03 pm

    papa_umau wrote:While I believe that we have nothing to learn from the Icelandic government about how to regulate our banks, I do think that how that government dealt with the offenders in that banking system is something that we COULD learn from.

    When one realises how much damage was done to the nations that suffered from the banking scandal it is surprising that more of these reckless and criminal bankers did not get prosecuted and serve jail sentences for their parts in this scandal.

    Of course the banking regulations that Thatcher and Reagan destroyed just before this crash came about should never have been reduced at all as if they had still been in place we may have seen this destructive scandal being nipped in the bud long before it was allowed to do the damage that it did do.

    Papa, to your knowledge is Iceland a free market ?

    From Wikipedia; the free encyclopedia

    The economy of Iceland is small and subject to high volatility. In 2011, gross domestic product was US$12.3bn, or $38,000 per capita, based on purchasing power parity (PPP) estimates.[6] The financial crisis of 2007–2010 produced a decline in GDP and employment, although the magnitude of this decline remains to be determined.

    Iceland has a mixed economy with high levels of free trade and government intervention. However, government consumption is less than in other Nordic countries.

    In the 1990s Iceland undertook extensive free market reforms, which initially produced strong economic growth. As a result, Iceland was rated as having one of the world's highest levels of economic freedom[7] as well as civil freedoms. In 2007, Iceland topped the list of nations ranked by Human Development Index[8] and was one of the most egalitarian, according to the calculation provided by the Gini coefficient.

    From 2006 onwards, the economy faced problems of growing inflation and current account deficits. Partly in response, and partly as a result of earlier reforms, the financial system expanded rapidly before collapsing entirely in a sweeping financial crisis. Iceland had to obtain emergency funding from the International Monetary Fund and a range of European countries in November 2008.


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    Re: Iceland Jails bankers and erases citizens’ debt.

    Post by papa_umau on Sat 01 Dec 2012, 2:40 pm

    I think that ALL governments in modern Western countries are based around the "free-market" principle as that is how any modern and Capitalistic country in the world works. Even in the far East like in China - where Communism still rules - this country has to trade with the rest of the world under the "free-market" principle.

    Britain and Iceland are not anything different from the rest.

    I guess that as far as the "free-market-principle" is concerned it is all a matter of degree as far as this principle is applied to each economy.


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    Re: Iceland Jails bankers and erases citizens’ debt.

    Post by Parliament.... on Sat 01 Dec 2012, 2:48 pm

    papa_umau wrote:I think that ALL governments in modern Western countries are based around the "free-market" principle as that is how any modern and Capitalistic country in the world works. Even in the far East like in China - where Communism still rules - this country has to trade with the rest of the world under the "free-market" principle.

    Britain and Iceland are not anything different from the rest.

    I guess that as far as the "free-market-principle" is concerned it is all a matter of degree as far as this principle is applied to each economy.

    """"Iceland has a mixed economy with high levels of free trade and government intervention"""

    Papa, note the above, and note that Britain is a free market with no state intervention.
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    Re: Iceland Jails bankers and erases citizens’ debt.

    Post by papa_umau on Sat 01 Dec 2012, 3:14 pm

    Again, as I already said....."It's just a matter of degree !"


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    Re: Iceland Jails bankers and erases citizens’ debt.

    Post by Guest on Sun 02 Dec 2012, 9:00 am

    So let me get this right Ivanhoho - you think it acceptable for banks to default on their loans? Does that mean it is acceptable for them to keep monies on deposits too? No of course not.

    The situation in Iceland is special and I would not draw any conclusions about banking anywhere else - though if Scotland votes for independence you might find a similar collapse at some time in the future there. Sure there may have been criminal acts by individuals - I don't know for sure and don't intend to find out - but it does not mean by any stretch of the imagination that this is the way forward. There will be little or no credit extended towards Iceland for years to come by the international community.

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