Fjárhagskrísan

Fjárhagskrísan, often referred to as the Icelandic financial crisis, was a severe economic collapse that occurred in Iceland in late 2008. The crisis was characterized by the rapid and near-total collapse of the country's three largest commercial banks: Kaupthing, Landsbanki, and Glitnir. These banks had experienced explosive growth in the years leading up to the crisis, largely through aggressive expansion and high levels of debt, significantly outstripping the size of the Icelandic economy.

The crisis was triggered by a combination of factors, including the global financial crisis of 2008, a prolonged period of high leverage in the Icelandic banking sector, and an overvalued Icelandic krona. As the global credit markets tightened, the Icelandic banks found it increasingly difficult to refinance their substantial debts. This led to a loss of confidence among international creditors and depositors, and ultimately to the freezing of interbank lending and the banks' inability to meet their obligations.

In response, the Icelandic government nationalized the banks and enacted emergency legislation, the so-called "Icesave" law, to stabilize the financial system. This involved separating the "good" assets and liabilities of the banks into new entities, while the "bad" assets and liabilities were left in the old banks for liquidation. The crisis had a profound impact on Iceland, leading to a sharp depreciation of the krona, soaring inflation, high unemployment, and a significant decline in GDP. The country subsequently implemented stringent austerity measures and capital controls, and over several years, gradually recovered its economic footing.

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