Ok, so Iceland’s banks got too big. It’s a country of 320,000 people with a GDP of only barely more than the debts of it’s three collapsed banks. There’s simply no way the government can pay savers back.
I don’t know quite who’s fault that is. Is it possible within the modern capitalist system for a government to order a private bank within it’s remit to stop expanding? Stop investing? Stop making large amounts of money? I doubt it.
Two weeks ago these banks were solid. It’s the outside influences and “loss of confidence” that forced their collapse.
But the UK government is doing something I can’t quite believe: using anti-terror legislation to freeze Icelandic assets. We’re about to bankrupt an entire country.
Why take it out on the people of Iceland, when the people of the Square Mile seem to be going on as normal (or at least crying into their millions)? Why not sue for the money from the assets of the banks themselves? From the people who withdrew support?
If there were losses on a comparable scale in the UK, (say Natwest, Barclays, LTSBHBOS and HSBC UK all went tits up) would our government be willing and able to pay up to investors?
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