A year after Iceland's stunning economic collapse, most of the
directors of its failed banks have fled abroad, tired of angry verbal
attacks and the red paint daubed on their homes and cars. A year ago,
the small North Atlantic nation saw its oversized financial sector
crumble amid the global credit crisis, as the government took over
the three biggest banks and the stock market suspended all financial
shares. With the country on the brink of bankruptcy, Icelanders took
to the streets to vent their fury over having lost their savings and
their jobs -- while inflation soared and the currency plunged - - all
because of the actions of what they saw as a few overly-aggressive
and out-of-control bankers. According to Iceland's special prosecutor
investigating the collapse of the banks, 50 to 60 people from the
banks' top layers of management have been taken in for questioning
so far -- but no charges have been pressed to date. Up to the crash,
Iceland had experienced more than a decade of prosperity as its
financial groups invested heavily abroad and those who ran the banks
were seen as wizards. Now, a year later, with the economy expected to
shrink 9.0 percent this year and household consumption down by 20
percent, most of the bank directors have moved abroad to work as
financial consultants for undisclosed employers. Birgitta Jonsdottir,
a frontline protester turned MP, is surprised the bankers' personal
wealth has not been frozen. "It would have been very normal to freeze
their assets," she said, predicting a return of last year' s weekly
protests and describing the situation as a "ticking bomb." A group
called "Skapofsi", or "Rage" in English, has taken it upon itself to
remind the former heroes that they are no longer welcome in Iceland,
splashing red paint on their houses and cars. In interviews AFP
conducted with bankers ahead of the one-year anniversary, most
requested anonymity and were hesitant to describe the effect the
financial and economic collapse has had on their personal lives. They
refused to discuss the threats they are subjected to, the risk of
lawsuits they face and their fears that their new employers will be
inundated with angry emails if anyone finds out where they are
working. But they were more willing to discuss what lay behind the
collapse. The bankers agree that Iceland's financial system had grown
too big, at 11 times annual gross domestic product, which meant the
central bank and the government had limited options when it came to
helping save the banks. The government took control of the first bank,
Glitnir, on September 29 , 2008. "Once Glitnir was nationalised, the
situation was pretty much hopeless. I see that now, even though I
did not realise it at the time," Armann Thorvaldsson, the former CEO
of Kaupthing Singer & Friedlander, a London subsidiary of Iceland's
biggest bank Kaupthing, told AFP. The bankers at the time accused the
government, and the US and Europe, of turning their backs on the
banks. "Almost every country was supporting its banks with liquidity
and capital," London-based Thorvaldsson said. Yet, he acknowledged,
it was uncertain whether Iceland's central bank would have had the
financial means to help. "Looking back, I also question whether it
would have been justifiable to pour such large amounts into the
financial system." Halldor J. Kristjansson, the former chief
executive of the second-biggest bank Landsbanki and who now works as a
consultant abroad, agreed.
RSS Feed (xml)
