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Iceland is rapidly recovering after telling banks to shove off!


Ireland bailed out it’s banks. Iceland told the banks to shove off. The international media pronounce the nation of Iceland dead and was practically holding a public funeral. So what happened next?

From Investors.com…

To bail out or not to bail out?

The most definitive answer to that central question for managing banking blowups comes from Iceland and Ireland, home to two of the biggest financial bubbles of the past crisis.

More than three years after the two national governments made opposite decisions — Iceland only protected depositors, while Ireland also extended a broad guarantee to bondholders — there is little doubt among economists that Iceland chose the wiser path.

Iceland, which had its investment-grade rating restored in February by Fitch Ratings, has stabilized net debt at 65% of gross domestic product and returned to financial markets.

Meanwhile, Ireland, still on credit life support after saddling taxpayers with bank-related debt equal to 40% of GDP, remains a potential land mine in the euro area’s road to recovery.