Preludes to the Icelandic Financial Crisis (eBook)

FRIDRIK M. BALDURSSON Professor, School of Business, Reykjavik University, Iceland WILLEM BUITER Chief Economist, Citigroup, USA LARS CHRISTIANSEN Senior Analyst, Danske Bank, Denmark DANIEL GROS Director, Centre for European Policy Studies, Brussels, Belgium THORVALDUR GYLFASON Professor of Economics, University of Iceland, Iceland TRYGGVI T. HERBERTSSON Member of Icelandic Parliament and a former Professor of Economics at the University of Iceland, Iceland FREDERIC MISHKIN Alfred Lerner Professor of Banking and Financial Institutions, Graduate School of Business, Columbia University, USA RICHARD PORTES Professor of Economics, London Business School, UK ANNE SIBERT Professor of Economics, Department of Economics, Mathematics and Statistics, Birkbeck College, University of London, UK THROSTUR O SIGURJONSSON Assistant Professor, School of Business, Reykjavik University, Iceland GYLFI ZOEGA Professor of Economics, Department of Economics, University of Iceland, Iceland CARSTEN VALGREEN Chief Economist, Danske Bank, Denmark

Cover 1
Half-Title 2
Title 4
Copyright 5
Contents 6
List of Figures 8
List of Tables 12
Notes on the Contributors 14
1 Introduction 15
2 The Chapters in this Volume 27
3 Privatization and Deregulation: a Chronology of Events 40
Part I International Organizations and the Central Bank of Iceland 55
4 International Monetary Fund, Article IV Consultations 2006 and 2008 56
5 OECD Economic Survey of Iceland, 2006 and 2008 63
6 Central Bank of Iceland Financial Stability Reports 2006–8 67
Part II Other Reports 87
7 Iceland – Macro Imbalances Trigger Negative Outlook 88
8 Iceland: Geyser Crisis 100
9 Financial Stability in Iceland 118
10 The Internationalization of Iceland’s Financial Sector 171
11 The Icelandic Banking Crisis and What to Do about it: the Lender of Last Resort Theory of Optimal Currency Areas 252
12 Iceland on the Brink? Options for a Small, Financially Active Economy in the Current Financial Crisis Environment 287
13 Events in Iceland: Skating on Thin Ice? 301
14 A Spending Spree 307
15 Monetary Turbulence and the Icelandic Economy 313
Part III Lessons for Other Countries 338
16 Overbanked and Undersized: Lessons from Iceland 339
Appendix: Statistical Tables 351
Index 353