by Baxter Dmitry
October 8, 2016
Iceland has differed
from the rest of Europe and the U.S.
by allowing bankers to be
prosecuted as criminals,
rather than treating them as a
Iceland has found nine top bankers
guilty and sentenced them to decades in jail for crimes related to
the 2008 economic crash.
On Thursday Iceland's Supreme Court returned a guilty verdict for
all nine defendants in the
Kaupthing (Bank) market manipulation case,
after a long running court trial which began in April last year.
Kaupthing was a big international bank headquartered in Reykjavik,
Iceland. It expanded internationally for years, but
collapsed in 2008 under huge debts,
crippling the small nation's economy.
By demanding that bankers be subject to the same laws as the rest of
society, Iceland opted for a very different strategy in the wake of
the financial crisis to rest of Europe and the U.S., where banks
were fined nominal amounts, and directors and chief executives
escaped punishment altogether.
While the U.S. and UK governments provided bail outs and government
stakes for their big banks with tax-payers' money -
essentially giving bankers the green light to continue behaving in
the same way - Iceland adopted a different approach, declaring it
would let the banks go bust, weed out and punish the criminal
element at the top of the banks, and protect the savings of the
Former director of the bank, Hreiðar Már Sigurðsson, who was
found guilty and jailed last year, was also given a six-month
extension to his sentence on Thursday.
According to Iceland Monitor, the bankers are found
guilty of crimes relating to
deceitfully financing share purchases - the bank lent money for the
purchase of the shares while using its own shares as collateral for
They are also found guilty of creating a misleading demand for
Kaupthing shares by means of deception and pretence.
These guilty verdicts are just the latest in Iceland's unprecedented
clampdown since the economic crash.
Authorities have been pursuing,
...for crimes ranging from insider
breach of duties
lying to officials
Meanwhile the economy that collapsed
so spectacularly has rebounded after letting its banks
go bust, imposing capital controls and protecting its own
citizens rather than the elite bank bosses responsible for the mess.
This determination to hold people to account for actions that caused
intense financial misery contrasts strongly with the U.K., the rest
of Europe and the U.S..
Yes, fines were imposed on the 20
biggest banks for transgressions such as,
...but these costs fall on
shareholders and, by hampering the banks' ability to
lend, they also punish the rest of society.
Meanwhile the guilty senior bankers, thanks to
government bail outs, carry on making enormous profits and
collecting their obscene bonuses as though nothing
Last year, the International Monetary Fund (IMF)
declared that Iceland had achieved economic recovery
"without compromising its welfare model" or unduly punishing its
citizens for crimes committed by its bankers.
Iceland is right to jail it's bankers - and the U.S. and Europe is
wrong to merely slap a few wrists and give the green light to future