The Economic Crisis Of Iceland - 931 Words

Even though freedom for the private sector is a virtue, there should be government regulation in place due to corporate official’s inability to satiate their hunger for personal wealth endangering the global economy and the event in 2008 which was the global economic crisis occurring which could have been prevented or at least lessened. Iceland is known for its beautiful landscapes and vast expanses of nature. Human civilization sparsely dots the land creating an aura of solitude everywhere you go. Iceland can boast that it has good education, clean air, and barely any crime. However, in 2000 the government in Iceland initiated a plan for a broad policy of deregulation. Which would begin a set of disastrous events. Iceland began with†¦show more content†¦American accounting firms audited the Icelandic banks and investment firms which found nothing to be out of the ordinary. Credit rating agencies reported that Iceland was blooming in the economy. Credit rating agencies promoted the banks to the highest possible rating of Triple-A in 2007. Then in 2008 Iceland’s banks collapsed causing countless people to lose their savings. Unemployment tripled in the six months. Government regulators, whose job was to ensure financial stability, had done nothing. One third of Iceland’s regulators worked at those banks. This problem exists the U.S. In September of 2008 the U.S. investment bank Lehman Brothers filed for bankruptcy and the collapse of AIG, the world’s largest insurance company, initiated the global financial crisis. The effect this had on shares globally was catastrophic. This in turn cost the world tens of trillions of dollars, doubling the national debt of the Unites States and rendering thirty million people unemployed. This crisis was not an accident. It was caused by an industry which had no supervision. Since the 1980’s the rise of the U.S. financial sector has led to a series of increasingly dire financial crisis. Each one of them causing more damage while the industry has made more and more money. After the Great Depression the U.S. had forty years of economic growth without another crisis.Show MoreRelatedIceland Economic Crisis Essay796 Words   |  4 Pages In 2008, there was global economic crisis that people lost their jobs, savings and homes. Iceland has a stable democracy, but they have low employment and government debt. Gylfi Zoega said Iceland had good health care and education. Also, not much crime and good place where families can live. Iceland allowed multinational corporations, such as Alcoa, it build huge aluminum-smelting plants. In Iceland, the government privatized their 3 largest banks. The 3 banks borrowed 120 billion dollars. TheRead MoreShould Iceland Adopt Canadian Dollar?1387 Words   |  6 Pages Econ 345 Assignment 2 Topic: Should Iceland adopt Canadian Dollar? 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The entireRead MoreIs the banking industry responsible for the economic disaster in Iceland?1759 Words   |  8 PagesWith about 320,000 people, Iceland has only about as many inhabitants as an average German city. Nevertheless, the island republic is among the richest nations in the world with one of the highest living standards. Iceland is a member of the United Nations, NATO and the European Economic Area, as well as many other international organizations. â€Å"Is the banking industry responsible for the economic disaster of Iceland?† Until the 80’s, Iceland was a more regulated economy with many interventions byRead MoreThe Treaty Of Rome Established The European Economic Community ( Eec )940 Words   |  4 PagesThe Treaty of Rome established the European Economic Community (EEC) in 1957. With this treaty member countries goods would not be taxed, but outsiders’ goods would. The member countries of the EEC specialized their products and their economies flourished. 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Development is measured from the trough (or base) of the past business cycle to the pinnacle of the present cycle, while recession is measured from the top to the trough. (n.g., What is the Business Cycle , n.g.) 1.2 Iceland GDP growth The GDP in Iceland progressed 3.7% per year in the second quarter of 2016, abating from an upwardly modified 4.4% development in the past quarter. Net exchange contributed contrarily as fares hindered while imports expanded more on the positive side,