Iceland sentences 26 bankers to a combined 74 years in prison, James Woods | October 21, 2015

Unlike the Department of Justice, Iceland is focusing on prosecuting the CEOs rather than low-level traders.

In a move that would make many capitalists’ head explode if it ever happened here, Iceland just sentenced their 26th banker to prison for their part in the 2008 financial collapse.

In two separate Icelandic Supreme Court and Reykjavik District Court rulings, five top bankers from Landsbankinn and Kaupping — the two largest banks in the country — were found guilty of market manipulation, embezzlement, and breach of fiduciary duties. Most of those convicted have been sentenced to prison for two to five years. The maximum penalty for financial crimes in Iceland is six years, although their Supreme Court is currently hearing arguments to consider expanding sentences beyond the six year maximum.

After the crash in 2008, while congress was giving American banks a $700 billion TARP bailout courtesy of taxpayers, Iceland decided to go in a different direction and enabled their government with financial supervisory authority to take control of the banks as the chaos resulting from the crash unraveled.

Back in 2001, Iceland deregulated their financial sector, following in the path of former President Bill Clinton. In less than a decade, Iceland was bogged down in so much foreign debt they couldn’t refinance it before the system crashed.

Almost eight years later, the government of Iceland is still prosecuting and jailing those responsible for the market manipulation that crippled their economy. Even now, Iceland is still paying back loans to the IMF and other countries which were needed just to keep the country operating.

When Iceland’s President, Olafur Ragnar Grimmson was asked how the country managed to recover from the global financial disaster, he famously replied,

“We were wise enough not to follow the traditional prevailing orthodoxies of the Western financial world in the last 30 years. We introduced currency controls, we let the banks fail, we provided support for the poor, and we didn’t introduce austerity measures like you’re seeing in Europe.”

Meanwhile, in America, not one single banking executive has been charged with a crime related to the 2008 crash and U.S. banks are raking in more than $160 billion in annual profits with little to no regulation in place to avoid another financial catastrophe.

James Woods ( AKA – JamesFromTheInternet) is an independent journalist based in New York City who can be reached on twitter @JamesFTInternet or via email: [email protected]

^Source/linky?

Username Taken wrote:http://usuncut.com/world/iceland-senten ... in-prison/

Thanks, UT. I had a sizeable amount in Icesave Bank, a Landisbankin subsidiary in The Netherlands, when they went tits up. I was cycling in Turkey at the time and was close to Iranian border and about to enter Iran. In Iran, at the time, were no atm's catering to tourists so I needed cash. Stupidly enough I had only that Icesave account available. My brother-in-law sent some money so I could continue.
You live and learn.

vladimir wrote:Iceland sentences 26 bankers to a combined 74 years in prison, James Woods | October 21, 2015

Unlike the Department of Justice, Iceland is focusing on prosecuting the CEOs rather than low-level traders.

In a move that would make many capitalists’ head explode if it ever happened here, Iceland just sentenced their 26th banker to prison for their part in the 2008 financial collapse.

In two separate Icelandic Supreme Court and Reykjavik District Court rulings, five top bankers from Landsbankinn and Kaupping — the two largest banks in the country — were found guilty of market manipulation, embezzlement, and breach of fiduciary duties. Most of those convicted have been sentenced to prison for two to five years. The maximum penalty for financial crimes in Iceland is six years, although their Supreme Court is currently hearing arguments to consider expanding sentences beyond the six year maximum.

After the crash in 2008, while congress was giving American banks a $700 billion TARP bailout courtesy of taxpayers, Iceland decided to go in a different direction and enabled their government with financial supervisory authority to take control of the banks as the chaos resulting from the crash unraveled.

Back in 2001, Iceland deregulated their financial sector, following in the path of former President Bill Clinton. In less than a decade, Iceland was bogged down in so much foreign debt they couldn’t refinance it before the system crashed.

Almost eight years later, the government of Iceland is still prosecuting and jailing those responsible for the market manipulation that crippled their economy. Even now, Iceland is still paying back loans to the IMF and other countries which were needed just to keep the country operating.

When Iceland’s President, Olafur Ragnar Grimmson was asked how the country managed to recover from the global financial disaster, he famously replied,

“We were wise enough not to follow the traditional prevailing orthodoxies of the Western financial world in the last 30 years. We introduced currency controls, we let the banks fail, we provided support for the poor, and we didn’t introduce austerity measures like you’re seeing in Europe.”

Meanwhile, in America, not one single banking executive has been charged with a crime related to the 2008 crash and U.S. banks are raking in more than $160 billion in annual profits with little to no regulation in place to avoid another financial catastrophe.

James Woods ( AKA – JamesFromTheInternet) is an independent journalist based in New York City who can be reached on twitter @JamesFTInternet or via email: [email protected]

And while nearly every country in the world has returned to pre-crisis GDP numbers, Iceland still sits well below the pre-crisis number... like 30% below. In fact, their per-capita GDP is only $7,000 higher than the peak low of the crisis.

But you know... high horses > actual economic growth right?

oh... and...

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email [email protected] to buy additional rights. http://www.ft.com/cms/s/0/34ab12fc-0d9b ... z3qdh5RE7k

But there is a problem with this cheering tale. All the laudable growth has not magically removed the cause of Iceland’s crisis: debt. Its sovereign debt is “just” 84 per cent of gross domestic product, according to the International Monetary Fund. But if you add the remaining liabilities of the banks – which are implicitly owned by the government – the total debt ratio is 221 per cent, and there is little chance of the island repaying it in full.

http://www.ft.com/cms/s/0/34ab12fc-0d9b ... z3qdgrrJde

And their solution to this... fiscal fascism... is terrifying to foreign investors, which will prevent any of that from changing anytime soon:

The government has managed to avoid dealing with this problem because it has been using capital controls to prevent investors freely exchanging the krona for foreign currency.

Meanwhile:
http://www.economist.com/news/finance-a ... er-side-qe

The government bonds it has bought with newly created money, a strategy dubbed “quantitative easing” (QE), could fall in value if interest rates rose.

The reality has been happier. The Fed’s assets have ballooned to nearly $3 trillion, mostly in Treasuries and mortgage-backed securities (MBS). It paid $89 billion in profit to the Treasury for 2012, the largest in a string of record-breaking remittances (see chart). Before the crisis, the Fed’s profits were typically only a third of that.

LOL, OD, patron saint of gun nuts and financial terrorists.