When the Viking Turns into a Banker: The Changes in Icelandic Banking Law Following the Crisis in 2008

• Main Author: Stolarek, Jakub
• Format: Article in Journal/Newspaper
• Language: Polish
• Published: Uniwersytet Jagielloński. Fundacja Utriusque Iuris 2013
• Subjects: droit; eco; Iceland
• Online Access: https://bibliotekanauki.pl/articles/518904.pdf; https://bibliotekanauki.pl/articles/518904

In 2008, the financial crisis broke out in Iceland and caused, after years of uncontrolled expansion, the collapse of its three biggest banks. The Icelandic state was forced to make a drastic intervention in their banking law in order to save the national economy. The Althing passed Act No. 125/2008, the so called Emergency Act, which enabled the state to take control over collapsed financial institutions. Domestic assets and obligations were transferred to the newly established state-owned banks whilst foreign liabilities stayed with old banks. This caused a long legal and diplomatic dispute between Iceland and the creditors of banks. Over time, when the economic situation stabilized, some of the harshest regulations of the Emergency Act were replaced by amendments made in November and April. Furthermore, the act on the Special Investigation Commission, the act on the Special Prosecutor Office and post-crisis attempts to change the Icelandic constitution are briefly described. Eventually, the severe legal measures taken by Iceland proved successful, although the crisis shows that law and reality still occasionally go their separate ways.