1. Iceland best place to live, Africa worst UN Reuters 2007
ICELAND CrisisLauri Lnelaid

2. Iceland
HDI 2007 0,968, 1st. Norway and Australia followed
GDP per capita 2007 64 190 USD
Easy access to money provided by Banks
Strong insurance policy (2 pension schemes, health insurance etc)
3. Estonia
HDI 2007 0,883, 40th
GDP per capita 2007 15 578 USD
4. Business Vikings
Jon Asgeir Johannesson establisher of Baugur Group
Lydur and Agust Gudmundsson aka The Bakka Brothers establishers of Bakkavor and controlling stakeowners in Exista bank
Bjorgolfur Gudmundsson - Iceland's second businessman worth more than a billion dollars, ex-chairman of Landsbanki
5. 6. The scheme
Bankruptcy
Loans money
No money for depositors
Buys bills/notes/bonds
No money to pay back loan
No money to pay to creditors
Buys capital or expands
7. The Baugur Tragedy
No money for depositors
Loans money to
Jon Asgeir Johannesson
Invests into
Landsbanki calls in
1 000 000 000
e.g. Hamleys, House of Fraser, Goldsmiths
No money to pay back
8. The inflation rate
9. The scenario
Risky loans by Kaupthing, Landsbanki and Glitnir (debt in excess of 50 billion)
Local household debt -> inflation ->
High prices -> high interest rates (15,5%) ->
Foreign depositors (Icesave, Kaupthing Edge)
10. The scenario
Global financial crisis
"Iceland is on the brink of collapse. Inflation and interest rates are raging upwards. The krona, Iceland's currency, is in freefall The Guardian, 5 October 2008
Run on deposits in the UK (300 000 UK savers)
11. 12. The consequence
Enterprises bankruptcy locals lose their jobs
UK and Belgium depositors have lost their assets
Britain declared Icelanders as terrorists
Thirdof the population consideredemigration
13. Solution
Never trust Icelandic banks?
14. Solution
Loan from IMF
15. If there are any questions don`t hesitate to ask!
16. Thank you for Listening