He calculates that the so-called Icelandic “financial elite” consisted of no more than 30 people. The new banks funded the politicians who had privatised them and global expansion came to follow a familiar pattern: “1) Icelandic bank with dubious credentials bids for established foreign bank using borrowed money; 2) targeted bank eagerly takes the offered cash, claiming to be acting in the interest of shareholders, then registers doubts with FSA or other regulatory body; 3) FSA contacts Icelandic regulator, who offers reassurance; 4) Icelandic regulator attends school reunion with Icelandic banker.”
Gradually it became clear that prime minister Oddsson had created a monster that was devouring his own country. By the time he left office in 2004, the assets of the three big banks — Glitnir, Kaupthing and Landsbanki — were as large as the country’s gross domestic product; by 2006, they were eight times the size; by 2008, on the eve of the world’s financial collapse, 10 times.
It is hard to think of a European country more incompetently run in the past 20 years than Iceland. The credit crunch bankrupted the nation. Boyes reproduces in its entirety the chilling transcript of the telephone conversation between Britain’s chancellor, Alastair Darling, and his Icelandic counterpart, Arni Mathieson, as news broke that the Icelandic banks were intending to default on their obligations to their British customers. “We are in a very, very difficult situation,” wails Mathieson. “I can see that,” says Darling, before adding, in the quietly threatening manner of a mafia accountant who wants his boss’s money back: “You have to understand that the reputation of your country is going to be terrible.”
- Sunday Times Book Review
`Boyes, an award-winning foreign correspondent who has been reporting in Icelandic affaires for the past three decades, shows the complex interweaving and rivalries within and between its nascent oligarchies, invariably with a telling detain to illuminate each stage of the descent into economic chaos'
Roger Boyes (1952) is a writer and prize-winning European correspondent for The Times newspaper, covering Germany and northern Europe. He also has a column in German newspaper Der Tagesspiegel entitled 'My Berlin'.
Boyes entered journalism as a Reuters correspondent in Moscow (1976–1977), joined the Financial Times as an East Europe specialist in 1978 and was Bonn correspondent of the FT 1979 – 81. He then switched to the Times and became East Europe correspondent based in Warsaw where he covered the solidarity revolution and the imposition of martial law. Since then he has been posted to Rome as a Southern Europe correspondent (1987–89), Bonn and Berlin correspondent 1993- 2010.
Boyes has been reporting from Iceland since he was sent on his first foreign assignment to cover the Cold Wars in 1976 and is the author of eleven previous books.