Saturday, January 26, 2013

Let banks go bankrupt

The president of tiny Iceland is at Davos as a honored guest because that country's response to the banking crises of 2007-8 was easily the most successful by any objective measure.  The key, according to Grimsson was to ask his critics, "Why do they consider the banks to be the holy churches of the modern economy?  Why aren't banks like airlines and telecommunication companies?"

Good questions.  The obvious advantage this man has over his contemporaries is that he refuses to believe that bankers are magicians.

Iceland President Olafur Ragnar Grimsson tells Al Jazeera's Stephen Cole that Europe should let banks that are ran "irresponsibly" go bankrupt. Speaking at the annual World Economic Forum in Davos, Grimsson also held his country as a model of economic recovery after its near-collapse four years ago. "We didn't follow the traditional prevailing orthodoxies. And the end result four years later is that Iceland is enjoying progress and recovery."

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