Economy of Iceland

Source: Wikipedia. Pages: 23. Chapters: Geothermal power in Iceland, Icelandic króna, 2008-2011 Icelandic financial crisis, Whaling in Iceland, Economic history of Iceland, OMX Iceland 15, Icelandic outvasion, Financial Supervisory Authority, Iceland Stock Exchange, Beer in Iceland, Hoyvík Agreement, OMX Iceland 6, The Report of the Althingi Special Investigation Commission, Banana production in Iceland, Depositors' and Investors' Guarantee Fund, ICEX Main. Excerpt: The 2008-2011 Icelandic financial crisis is a major ongoing economic and political crisis in Iceland that involves the collapse of all three of the country's major commercial banks following their difficulties in refinancing their short-term debt and a run on deposits in the United Kingdom. Relative to the size of its economy, Iceland's banking collapse is the largest suffered by any country in economic history. In late September 2008, it was announced that the Glitnir bank would be nationalised. The following week, control of Landsbanki and Glitnir was handed over to receivers appointed by the Financial Supervisory Authority (FME). Soon after that, the same organisation placed Iceland's largest bank, Kaupthing, into receivership as well. Commenting on the need for emergency measures, Prime Minister Geir Haarde said on 6 October, "There a very real danger ... that the Icelandic economy, in the worst case, could be sucked with the banks into the whirlpool and the result could have been national bankruptcy." He also stated that the actions taken by the government had ensured that the Icelandic state would not actually go bankrupt. At the end of the second quarter 2008, Iceland's external debt was 9.553 trillion Icelandic krónur (EUR50 billion), more than 80% of which was held by the banking sector. This value compares with Iceland's 2007 gross domestic product of 1.293 trillion krónur (EUR8.5 billion). The assets of the three banks taken under the control of the FME totaled 14.437 trillion krónur at the end of the second quarter 2008. The financial crisis has had serious consequences for the Icelandic economy. The national currency has fallen sharply in value, foreign currency transactions were virtually suspended for weeks, and the market capitalisation of the Icelandic stock exchange has dropped by more than 90%. As a result of the crisis, Iceland is currently undergoing a severe economic recession; the nation's gross domestic product decreased by 5.5% in real terms in