Andri Snær Magnason on Iceland's collapse and recovery, in Eurozine:
When the global recession crisis hit, Iceland suddenly made world news. The headlines were breathtaking. Collapse, national bankruptcy and demonstrations on the streets. In Vanity Fair you could read descriptions of burning Range Rover jeeps and people stocking up on groceries. Actually, neither story was true. One man was suspected of having set his luxury car on fire and Iceland continued to export fish. The collapse, however, was a fact. Iceland was one of the worst casualties of the global financial crisis. The Icelandic stock market, which at its peak had reached 9000 points, stood at 14 points after the collapse. This rollercoaster ride was as dramatic as the statistics.
In the five years between 2002 and 2008, Icelandic banks had gone from serving a small local market to operating as large international corporations. They grew tenfold and had become twelve times richer than the Icelandic gross national product. Their sights were set even higher: every single bank possessed drawings of new headquarters which were supposed to be ten times larger than those they had in 2007.
The banks employed a young generation full of confidence – they knew their way around the business districts of London, New York, Tokyo and Shanghai. They were highly educated with postgraduate degrees from Harvard, MIT and LSE. They spoke more languages than their parents and knew how to put together complicated financial transactions, forward contracts, derivatives and all those things ordinary people don't understand. This was the most highly educated generation in Icelandic history and the banks had an insatiable need for educated manpower. They became a black hole for talent, sucking in the best people.