Nina Eichacker: Lessons from Iceland’s Financial Crisis

From Naked Capitalism:

A look at Iceland’s financial crisis, why it happened and what can be done to mitigate the potential for similar chaos in the future.

Iceland’s 2008 financial crisis should have been foreseen. By 2006, banking and economic data described an overheating financial sector and aggregate economy, and analyses by private and public researchers had reports describing those trends and their likely consequences. However, many were still surprised by the onset of Iceland’s large financial crisis. These events point to the dominance of neoliberal theories about the necessity of financial liberalization, and an assumption that a northern European country would have the institutional sophistication to avoid financial crises like those observed in developing countries that rapidly liberalize their financial sectors. A wider adherence to Keynesian and Minskyian theories of financial crisis would have helped predict Iceland’s crisis, and future such episodes.

One factor that contributed to the Icelandic financial crisis was the lack of financial market transparency...

 http://www.nakedcapitalism.com/2015/11/nina-eichacker-lessons-from-icelands-financial-crisis.html