Central Bank of Iceland’s Már Guðmundsson on crisis management and capital controls

Mar Gudmundsson

The over-heating Icelandic economy of the mid-2000s went into meltdown in October 2008, with the collapse of almost 90% of the country’s banking system. The debt of Icelandic banks at that time stood at 10 times the country’s GDP. As the banking system imploded, a foreign currency crisis ensued and Iceland plunged into recession – the country’s experiment to become an international financial centre came to an abrupt end.

As the events took place at the height of the global financial crisis, Icel

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