“Let The Banks Fail!”, Iceland’s Remarkable Economic Recovery

“[…] I think basically, all modern states, whether they are large or small, face similar challenges and could apply similar solutions, so in our case we decided to let the banks fail, they were private banks and, as I sometimes said, I never understood why somehow banks are the holy churches of the modern economy. Whereas it is normal to let all the companies go bankrupt and fail, suddenly when a bank is in trouble everybody comes rushing and says no, no, no, no, this can’t happen […] ”

4 years later, Iceland is recovering in a remarkable way – 3% economic growth, 5% unemployment and the states finances are in a reasonable shape.

“[…] By going against the established orthodox views prevailing in the U.S. and Europe we actually managed to create a recovery that is quite remarkable […]” – Olafur Ragnar Grimsson, Iceland Prime Minister