How Did Iceland Clean Up its Banks (And Why Can't We)?
The Inquiry
BBC
4.6 • 1.7K Ratings
🗓️ 9 February 2016
⏱️ 23 minutes
🧾️ Download transcript
Summary
At 4pm on 6 October 2008, as the global financial crisis ravaged Iceland’s economy, its prime minister addressed the nation. "There is a danger, fellow citizens," he said, "that Iceland could be sucked into the whirlpool and the result could be national bankruptcy. It was decided this morning to suspend trading with the banks. God Bless Iceland.”
The message was clear. Iceland was about to do what no other country had done - let its banking sector fail. And that was only the start. Over the coming years, Iceland would go on to do much more - clean up its banks and prosecute many senior bankers. And the story is still unfolding. Just two months ago, five more bank executives were jailed. So how exactly has Iceland done it? What happened next to Iceland’s economy? And why aren’t other nations following Iceland’s example?
(Photo: Protest against the Icelandic government 29 November 2008 in Reykjavik. Credit AFP/Getty Images)
Transcript
Click on a timestamp to play from that location
| 0:00.0 | BBC World Service, this is Helena Merriman with the inquiry. |
| 0:07.0 | This week, how did Iceland clean up its banks and why can't others follow its example. |
| 0:14.0 | On January the 6th, 2007 a group of men turned up at the harbour and Reykjavik. |
| 0:22.0 | They were there to start building one of Iceland's most ambitious. turned up at the harbour in Reykjavik. |
| 0:22.6 | They were there to start building one of Iceland's most ambitious projects, a new concert hall |
| 0:27.9 | that was set to become the largest glass building in Europe. |
| 0:31.6 | It was a sign of good times. In just seven years this tiny fishing |
| 0:36.2 | nation had become a global financial power, attracting traders from all over the |
| 0:40.9 | world with its high interest rates and low taxes. |
| 0:44.0 | An ordinary Icelanders had been enjoying the party, |
| 0:47.0 | binging on flat screen TVs, new cars and houses. |
| 0:51.0 | Iceland's banking sector had become 10 times the size of its economy, |
| 0:56.3 | but that high was short-lived. It was bad enough before Wall Street opened, but when New York started falling. |
| 1:05.0 | It has not been pretty in the Asian markets today. |
| 1:08.0 | Yesterday... |
| 1:09.0 | It has never seen Share Falls... |
| 1:11.0 | Response to the turmoil on Wall Street, all the markets down today, many of them tumbling |
| 1:16.1 | and trading... |
| 1:17.1 | In 2008, the global financial crisis hit Iceland hard. Credit dried up, unemployment soared, |
| 1:28.3 | and construction projects were abandoned. The half-finished concert hall towered over the city, a symbol of Iceland's days of excess. |
| 1:37.0 | As plans were being drawn up in capitals all over the world to bail out the banks, |
| 1:42.0 | Iceland started an extraordinary journey in a different |
... |
Please login to see the full transcript.
Disclaimer: The podcast and artwork embedded on this page are from BBC, and are the property of its owner and not affiliated with or endorsed by Tapesearch.
Generated transcripts are the property of BBC and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.
Copyright © Tapesearch 2026.