Iceland, Symbol of Financial Crisis, Finally Lifts Capital Controls -
By LIZ ALDERMANMARCH 14, 2017
Nine years after a giant banking crash made Iceland a symbol of the global financial crisis, the government on Tuesday effectively declared
that financial stability had been restored as it ended longstanding restrictions on the flow of money into and out of the country.
Iceland’s growth surge — the economy expanded 7.2 percent last year — represents a remarkable comeback since
2008, when the country’s three main banks failed and its currency and economy fell into a tailspin.
“Without the capital controls, Iceland would have suffered a much more serious fate,” said Yngvi Kristinsson, the
chief economist for the Icelandic Financial Services Association, a consortium of banks and insurance companies.
The current boom is healthier than the growth in the years leading up to the 2008 crash, which was driven
by the flow of foreign funds, said Asgeir Jonsson, an economics professor at the University of Iceland.
“It was hard to convince foreign investors to bring money into a country with capital controls,” Mr. Ludviksson said.
As long as Greece, now in its third international financial rescue program in seven years,
continues to labor under a huge debt, economists see little hope of a recovery.
The combined assets of Iceland’s three biggest banks were 14 times the size of the nation’s economic output when the 2008 crisis hit.
