Hækkunin

Hækkunin is a term of Icelandic origin that translates to "the escalation" or "the increase." It is most commonly used in the context of the Icelandic financial crisis that began in 2008. During this period, the term hækkunin referred to the rapid and unprecedented rise in the value of certain assets, particularly shares in Icelandic banks, before their subsequent collapse.

This period of intense market activity saw significant speculation and investment in the banking sector. The perceived success and growth of these institutions led to a widespread belief in their continued prosperity, fueling further investment. This created a cycle where rising stock prices encouraged more buying, further inflating asset values.

However, this rapid ascent proved unsustainable. The underlying economic fundamentals could not support the inflated valuations, and as global credit markets tightened, the Icelandic banking system, heavily reliant on foreign borrowing, faced severe liquidity issues. The term hækkunin thus encapsulates not just the period of rapid growth but also the inherent instability and eventual dramatic downturn that followed. It serves as a reminder of the dangers of speculative bubbles and the importance of sound financial management.