By Olafur Arnarson, Michael Hudson and Gunnar Tomasson
Today, from Greece to Iceland, governments are acting as enforcers or even as collection agents on behalf of the financial sector — and Iceland stands as a dress rehearsal for this power grab.
The problem of bank loans gone bad has thrown into question just what should be a “fair value” for these debt obligations. The answer will depend largely on the degree to which governments back the claims of creditors. The legal definition of how much can be squeezed out is becoming a political issue pulling national governments, the IMF, ECB and financial agencies into a conflict, pitting banks, vulture funds and debt-strapped populations against each other. Read more
By Prof Frederic Mishkin
“You ought to be in pictures” is something no one has ever said to me. And as one of a number of economists making uncomfortable cameo appearances in the new Hollywood documentary, “Inside Job,” I now know why.
In July 2009, I agreed to be interviewed on camera for a film that was presented to me as a thoughtful examination of the factors leading up to the 2008 global economic collapse. About five minutes after the microphone was clipped to my lapel, however, it became clear that my role in the film was predetermined – and I would not be wearing a white hat. Read more
by Robert Wade
With headlines blaring that as much as £10bn of UK savings are at risk in the collapse of Iceland’s banking system, the question arises as to why the finance directors of UK companies, local government authorities, charities and police left their assets with Icelandic banks during the first half of 2008? Why did they run the risks in return for an only slightly higher rate of interest? The same can be asked of the finance directors of German, Danish and Dutch organizations which stand to lose from the Icelandic collapse. Why did their respective national financial regulators not rein them in? Read more