SA: This has been an on going process for over 3 years now in Iceland and still hardly anyone here in Amerkia know nothing of this world news story or very little at that. How much longer are we going to allow to be dumbed down?
Iceland Recovering Fastest in Europe After Jailing Bankers Instead of Bailing them Out
Saturday, June 13, 2015
By Claire Bernish
After Iceland suffered a heavy hit in the 2008-2009 financial crisis, which famously resulted in convictions and jail terms for a number of top banking executives, the IMF now says the country has managed to achieve economic recoveryâ€”â€œwithout compromising its welfare model,â€ which includes universal healthcare and education.
In fact, Iceland is on track to become the first European country that suffered in the financial meltdown to â€œsurpass its pre-crisis peak of economic outputâ€â€”essentially proving to the U.S. that bailing out â€œtoo big to failâ€ banks wasnâ€™t the way to go.
Iceland is beautifully, yet unfortunately, unique in how it chose to handle the disaster. It simply let the banks fail, which resulted in defaults totaling $85 billionâ€”lending ample justification for the prosecution and conviction of bank executives for various fraud-related charges. The decision seemed shocking at the time, but the gamble has obviously paid off. Choosing a different route, the U.S. bailed out the banks and let executives off the hook by levying fines that ultimately ended up being paid by the corporationsâ€”meaning the executives ostensibly responsible for the mess got off scot-free.
â€œWhy should we have a part of our society that is not being policed or without responsibility?â€ special prosecutor Olafur Hauksson said after Icelandâ€™s Supreme Court upheld the convictions for three bankersâ€”and sentenced them to between four and five and a half years each. â€œIt is dangerous that someone is too big to investigateâ€”it gives a sense there is a safe haven.â€Hauksson, a police officer from a small fishing village, ended up taking the role of special prosecutor after being urged to do so when the first announcement to fill the position drew no applicants. The Icelandic Parliament even aided the prosecutionâ€™s effort by loosening secrecy laws to allow investigation without the hindrance of requiring court orders.
Six of the seven convictions that ended up in Icelandâ€™s Supreme Court have been upheld, and five cases were scheduled for the top court as of February. An additional fourteen cases appear likely to be prosecuted. By contrast, the animosity Americans felt toward their largest financial institutions after the bailout has grown bitter. After the banks pled guilty in May for manipulating global currency and interest rates, the court imposed a paltry fine of $5.7 billionâ€”which wonâ€™t even go to the people most affected by the fraud. Icelandâ€™s successful prosecutions and economic recovery remain the subject of envy for Americans.
Shortly, however, Icelandâ€™s economic health will be put to the test.
Strict capital controls that were applied when banks were circling the drain six years ago will now be loosened, allowing foreign investorsâ€”whose assets have essentially been frozen since thenâ€”to take their business elsewhere. To prevent a possible repeat crisis, the finance minister announced a 39% tax for anyone choosing to do so. â€œThe danger is capital flight and a consequent fall in the value of the krona,â€ explained University of Iceland economics professor, Thorolfur Matthiasson. â€œThat would be tantamount to October 2008, bringing back bad memories for ordinary people and possibly making most businesses unsustainable due to balance-sheet problems.â€
Though many are nervous, there is still cautionary optimism since Iceland has certainly weathered the storm before.
Claire Bernish writes for TheAntiMedia.org, where this article first appeared. Tune in! The Anti-Media radio show airs Monday through Friday @ 11pm Eastern/8pm Pacific. Image credit: Javier Soriano.
This article may be re-posted in full with attribution.
Posted by Popeye at 12:15 AM 0 comments