Iceland Goes Bankrupt | Iceland Bankrupt Because Global Crisis
Iceland bankrupt. Iceland the country of 304,000 people goes Bankrupt. This is not just the company or bank who bankrupt but this is the country.
I think that the global financial crisis is entering a new and more dangerous phase. The country is bankrupt and they cannot pay back its external debts. Even the Icelendic currency named the krona has become essentially valueless in the rest of the world. It is made Iceland goes bankrupt.
This made the country can no longer pay for imports. However this bankruptcy has no nothing to do directly with American real estate.
Kerry Capell of BW said that with the privatization of the banking sector, completed in 2000, Iceland’s banks used substantial wholesale funding to finance their entry into the local mortgage market and acquire foreign financial firms, mainly in Britain and Scandinavia.
He added that in just five years, the banks went from being almost entirely domestic lenders to becoming major international financial intermediaries.
Richard Portes, a professor of economics at London Business School, said that in 2000 two-thirds of their financing came from domestic sources and one-third from abroad. More recently—until the crisis hit—that ratio was reversed. But as wholesale funding markets seized up, Iceland’s banks started to collapse under a mountain of foreign debt.
That is not all. The worse thing is that with Iceland sitting outside the major currency trading blocs, there may be no one with the incentive or ability to save it. The country is looking for loans from the IMF and from Russia. However, the United Kingdom is actually threatening to sue Iceland to get back money.
Yeah Iceland Goes Bankrupt and that is so scarring.
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