Iceland's meltdown: the rise and fall of international banking in the North Atlantic

this paper shows how rapid privatization and liberalization of iceland's small local banks around 2000, combined with well-developed crony relations among the elite, enabled a small group of financiers to leverage government-guaranteed deposits into a vast wave of mergers and acquisitions abroad, and redistribute enough of the profits back home to make the economy boom. negative policy feedback loops were systematically undermined. the incoming left-wing government, with imf support, has managed to protect the bulk of the population from the worst of the effects.