March 15, 2010
- A d v e r t i s e m e n t
It’s time to start paying attention to the financial sinkhole that Iceland is trying to climb out of — the view from inside of it is eerily similar to our own.
An Icelandic savings bank, Icesave, had attracted billions in deposits from hundreds of thousands of British and Dutch citizens, due to the phenomenally high interest rates it offered. Icesave collapsed in 2008, for much the same reason Lehman Brothers, WaMu, and hundreds of local savings banks did: its bankers used their cash to make complicated, bad, leveraged investments, mostly on real estate.
The British and Dutch have made their citizens whole, bailing out Icesave after it became clear the Icelandic government didn’t have the resources to do the same.