How bad could the crisis get? Lessons from Iceland
November 12, 2008
Iceland's banking system is ruined. GDP is down 65% in euro terms. Many companies face bankruptcy; others think of moving abroad. A third of the population is considering emigration. The British and Dutch governments demand compensation, amounting to over 100% of Icelandic GDP, for their citizens who held high-interest deposits in local branches of Icelandic banks. Europe's leaders urgently need to take step to prevent similar things from happening to small nations with big banking sectors.
Published on VoxEU.org
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