Iceland's (2008) and Argentina's (2001) crises: Are there any similarities?

Abstract

Ever since the dreadful days in October of 2008, when the Icelandic financial system collapsed, questions about the failure have dominated the public debate in Iceland. To many local observers this still remains a mystery, because the three largest banks apparently were all well financed in the summer of 2008, and then suddenly went bankrupt in the fall. How could this happen and why? A detailed answer to this urgent question was expected to be answered in a report by an Icelandic parliamentary commission published in mid-April of 2010. The commission was set up in December of 2008 by the Icelandic parliament and was charged with investigating the causes of the banking collapse and identifying those individuals responsible, in either pursuing financial wrongdoing, or allowing it to happen under their supervision. The report was originally expected to be out in November of 2009, but was repeatedly postponed. This delay created enormous pressure and public speculations, about what might be expected in the report. In the paper some of the commission´s findings will be presented and evaluated, by giving insights to both global and local circumstances, which eventually might have led to the Icelandic demise. The findings will also be compared to the banking crisis in Argentina (2001), to seek whether any similarities can be detected to the Icelandic experience.