First it was jailing the bankers who helped create the financial collapse in Iceland, and now their Ministry of Finance is planning on giving the people profits and proceeds from the banks in a new reform policy that could revolutionize the banking system.
Iceland has been the premier model for how the U.S. and Eurozone should have dealt with the banks and individuals who nearly brought down the global financial system seven years ago, and in less than a decade not only has the island nation paid off all its debt obligations to the IMF, but has emerged as the only economy that is growing on production rather than central bank intervention.
First, Iceland jailed its crooked bankers for their direct involvement in the financial crisis of 2008. Now, every Icelander will receive a payout for the sale of one of its three largest banks, Íslandsbanki.
If Finance Minister Bjarni Benediktsson has his way — and he likely will — Icelanders will be paid kr 30,000 after the government takes over ownership of the bank. Íslandsbanki would be second of the three largest banks under State proprietorship.
“I am saying that the government take [sic] some decided portion, 5%, and simply hand it over to the people of this country,” he stated.
Because Icelanders took control of their government, they effectively own the banks. Benediktsson believes this will bring foreign capital into the country and ultimately fuel the economy — which, incidentally, remains the only European nation to recover fully from the 2008 crisis. Iceland even managed to pay its outstanding debt to the IMF in full — in advance of the due date. - The Anti-Media
In addition to this proposal, Iceland is debating the merits of separating their commercial and investment banking platforms to ensure that should Icelandic banks play in risky investments in the future, they will simply go bankrupt without cost to taxpayers, the government, or the people.
While Iceland is the true success story that came out of the Credit Crisis, the rest of the Western countries are the epitome of failure. And seven years after central banks lowered interest rates to zero, and infused tens of trillions of dollars into the financial system, economies in the U.S. and Eurozone remain tethered to quantitative easing and are now spiraling down towards an even worse crisis than the last.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com, Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.