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He helped save Iceland from the economic collapse. Here are five lessons.

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The financial crisis in 2008 and 2009 led Iceland to the edge of the cliff. The banks collapsed in & # 39; the world's third largest bankruptcy and tore the entire economy along with it.

There was a risk that the entire payment system would collapse. People would not have bought what they needed. The money wouldn't work.

The political and economic elite in Iceland had turned the banks into a card building that coincided with a crash in October 2008.

Confidence in the elite was so poor that Iceland wanted a central bank governor from abroad.

– All generations ultimately make their mistakes

In February 2009, Svein Harald Øygard answered yes at work.

Until August 2009 he was in the middle of the rescue operation. He has a background from the Ministry of Finance, the Labor Party and the McKinsey consulting firm.

Now he has written the book On the battlefield of the financial crisis about Iceland, the financial crisis and the recovery.

– All generations ultimately make their mistakes. As long as there are mountains of debt, crises will come, says Øygard.

Iceland's economy has recovered. Over the past three years, economic growth has amounted to 4.6-6.6 percent annually. Unemployment is less than 3 percent.

Øygard uses five lessons to cause new crises.

1. Pay a lot of attention to the growth of banks

If the banks begin to grow quickly, there is reason to pay extra attention. Banks earn money by borrowing money. Larger banks mean that there are more debts in a country.

Banks must go further to get customers. New customers with poorer payment capacity arrive. The risk of loss increases.

At the same time, the banks must get in More money so that they can borrow from more. Much of this allows the banks to borrow alone. In order to grow into distant customers, banks may need to seek external sources of financing.

Banks are becoming more vulnerable. This makes the entire economy more vulnerable to abrupt changes from within or from abroad.

2. Nobody should be fooled by large, beautiful figures

– The large numbers never look better for a country than just before the bubble bursts, says Øygard.

The economy can look powerful and powerful, but it is only on the surface and in the statistics for selected numbers.

High economic growth is considered good in principle. The pie for distribution is getting bigger, unemployment is falling and there are more and more jobs.

But growth can be financed by a high demand financed by loans. The debt cannot grow in the air. Abruptly stopping debt growth can abruptly halt the economy.

– It is important to keep an eye on the underlying conditions in the economy, says Øygard.

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3. Keep track of who borrows and who borrows

Banking is about debt rolling. Existing customers pay off their loans, while banks receive new customers with new debts.

The banks themselves bring large loans to finance their lending. Old loans are constantly being renewed with new loans. The bank can be good and solid, but always needs new money.

– There is a lack of liquidity that usually causes financial crises. Banks & # 39; financing is actually more dangerous than their lending, says Øygard.

Many banks had problems during the financial crisis because the current flow of funds stopped. Many had large long-term loans financed by short-term loans.

Therefore: are the financing sources of banks familiar or can they turn the tap quickly?

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4. Ensure good emergency plans in the drawer

When the banks are in crisis, there is no time to think about it. It is often about days.

– The functions of the bank must be saved in one way or another. The crisis solutions must be clear. Laws must be present. The measures must be clarified in advance between banks and authorities, says Øygard.

But the most important thing is the regulation of the banks in normal times. They must be rusted to cope with the crisis.

– After the financial crisis, the regulations have been considerably tightened. The banks must now have much more money in their own box as a buffer against difficult times, says Øygard.

5. Ultimately, smart and hard work is counting

The capacity to use labor, capital, natural resources and technology is the basis of the entire economy.

– High participation in working life, high production per year. Employees and entrepreneurs starting new businesses create material prosperity. Well-functioning banks are needed to make this possible, but not enough, says Øygard.

Iceland now has the highest employment rate in the world. Large deficits in the foreign economy are reduced to large surpluses.

Wow! Iceland in 2019

On Tuesday, the economic cooperation organization with the OECD presented new analyzes of the member states. For 2019, the OECD expects much lower economic growth in Iceland.

Fewer tourists to Iceland this year will cause an economic downturn. The reason: the Icelandic low-cost company Wow Air is bankrupt. It accounts for a third of all passengers to Iceland.

It is dangerous for such a small economy to be dependent on something big.

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