The Resource Gambling for resurrection in Iceland : the rise and fall of the banks, Fridrik Mar Baldursson and Richard Portes, (electronic resource)

Gambling for resurrection in Iceland : the rise and fall of the banks, Fridrik Mar Baldursson and Richard Portes, (electronic resource)

Label
Gambling for resurrection in Iceland : the rise and fall of the banks
Title
Gambling for resurrection in Iceland
Title remainder
the rise and fall of the banks
Statement of responsibility
Fridrik Mar Baldursson and Richard Portes
Creator
Contributor
Author
Subject
Language
eng
Summary
We examine the evolution of the Icelandic banking sector in its macroeconomic environment. The story culminates in the crisis of October 2008, when all three major banks in Iceland collapsed in three successive days. The country is still struggling to cope with the consequences. The paper follows on our report of autumn 2007. The macroeconomic boom that peaked in 2007 led to severe imbalances. The banks had expanded at a rapid pace and reported healthy profits, capital ratios and liquidity until their collapse. An official report (SIC, 2010) has, however, exposed severe weaknesses in the banks' assets and governance. The Icelandic Financial Services Authority (FSA) clearly knew little of the magnitude of large, single exposures and lending to the banks' owners, although they strongly maintained otherwise in autumn 2007. Neither the FSA nor the Central Bank of Iceland (CBI) saw the systemic risks created by lending to owners and related parties, which increased greatly from September 2007. With the financial turmoil that began in August 2007, the banks' access to capital markets was curtailed. They then gambled on resurrection, expanding their balance sheets and refinancing the investments of their owners and other big borrowers, while they should have been deleveraging and securing their liquidity positions in foreign currency. The banks also prevented their share prices from collapsing by purchases of their own shares in the stock market, offloading accumulated shares in private deals, usually financed by themselves. All this went on apparently unnoticed by regulators. The Icelandic banks did not buy toxic securities -- but together, they administered their own potent mix of systemic poison.Only a month before the collapse of October 2008 the banks all reported strong liquidity positions. These reports were misleading, but we also show how financing unravelled over the course of a few days, and collapse became inevitable. The rapid evaporation of liquidity and market funding is one of the key lessons of the story. Whereas the United States, the United Kingdom and other countries had the resources to bail out their irresponsible and illiquid banks, Iceland did not, and it received little foreign help or even sympathy. Iceland's response to the crisis, with its heterodox policies and aid from the IMF, has been relatively successful
Member of
Cataloging source
GZM
http://library.link/vocab/creatorDate
1957-
http://library.link/vocab/creatorName
Friðrik Már Baldursson
Illustrations
illustrations
Index
no index present
Literary form
non fiction
Nature of contents
  • dictionaries
  • bibliography
http://library.link/vocab/relatedWorkOrContributorName
  • Portes, Richard
  • Centre for Economic Policy Research (Great Britain)
Series statement
  • Discussion paper series,
  • Financial economics
  • International macroeconomics
Series volume
no. 9664
http://library.link/vocab/subjectName
  • Bank failures
  • Financial crises
  • Banks and banking
Label
Gambling for resurrection in Iceland : the rise and fall of the banks, Fridrik Mar Baldursson and Richard Portes, (electronic resource)
Link
http://www.cepr.org.ezproxy.eui.eu/content/discussion-papers
Instantiates
Publication
Note
  • "September 2013."
  • "Submitted 22 September 2013."
Bibliography note
Includes bibliographical references (pages 103-108)
Carrier category
online resource
Carrier category code
cr
Carrier MARC source
rdacarrier.
Content category
text
Content type code
txt
Content type MARC source
rdacontent.
Control code
FIEb17469648
Extent
1 online resource (108 pages)
Form of item
online
Media category
computer
Media MARC source
rdamedia.
Media type code
c
Other physical details
illustrations.
Specific material designation
remote
System control number
(OCoLC)858943104
Label
Gambling for resurrection in Iceland : the rise and fall of the banks, Fridrik Mar Baldursson and Richard Portes, (electronic resource)
Link
http://www.cepr.org.ezproxy.eui.eu/content/discussion-papers
Publication
Note
  • "September 2013."
  • "Submitted 22 September 2013."
Bibliography note
Includes bibliographical references (pages 103-108)
Carrier category
online resource
Carrier category code
cr
Carrier MARC source
rdacarrier.
Content category
text
Content type code
txt
Content type MARC source
rdacontent.
Control code
FIEb17469648
Extent
1 online resource (108 pages)
Form of item
online
Media category
computer
Media MARC source
rdamedia.
Media type code
c
Other physical details
illustrations.
Specific material designation
remote
System control number
(OCoLC)858943104

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