Iceland is Doing Much More than Just Urinating on Its Criminal Bankers

The Icelandic prison system is about to welcome the 26th banker responsible for the 2008 financial meltdown.

There are many differences between the United States and Iceland. One is a massive global superpower; the other is an itty-bitty Nordic state. One stretches across a continent; the other exists on a tiny volcanic island. One is famous for shaping the historical progress of the 21st century; the other produced Björk

One has put 26 bankers behind bars for their roles in the 2008 financial collapse. The other hasn't prosecuted a single one. Can you guess which is which?

Of Banksters and Men

In 2001, the Republic of Iceland decided to follow the lead of the United States and deregulated its financial sector. Because bankers are apparently wankers, a half-decade of market manipulation and improper dealings led to the most catastrophic economic meltdown in the small island nation's history. You might recall a similar thing happened here in the States.

Below, Icelandic President and super-cool Big Think expert Ólafur Ragnar Grímsson explains how his country dealt with its failed economy:

"When the financial crisis, hit we suffered in a traumatic way. We were for a while, perhaps exhibit number one of a failed financial system ... But then when we had to formulate policies how to deal with the financial crisis, we decided, in one way or another, to follow a different formula than from the traditional consensus in the previous 30 years of how you deal with a financial crisis. We did not save the banks; we let them go bankrupt."

Rather than rolling out an Icelandic version of TARP or introducing the sort of austerity measures that failed in the UK, Grímsson's government took control of the economy and introduced currency controls that righted the ship. They put forth referendums to allow the people to decide how Iceland should handle the banks' incurred debts. Iceland was the only European country in which the will of the people was prioritized over the "perceived interests of the markets," according to Grímsson.

And now Iceland, not long after being the posterchild of European economic collapse, is the shining emblem of European economic recovery.

  • Urinals in a Reykjavik bar display the faces of bankers responsible for the financial crisis; photo from 2008. (OLIVIER MORIN/AFP/Getty Images)
  • No Hard Feelings? Not Quite.

    Iceland's impressive rebound doesn't mean its citizens have eased their wariness. As mentioned above, and reported by independent journalist James Woods, the country is still going after the bankers who got them into this mess. According to Woods, a total of 26 have been sentenced a combined 74 years in prison for contributions to the financial crisis. The specific charges are "market manipulation, embezzlement, and breach of fiduciary duties." (Woods notes that the maximum sentence for these types of crimes is six years.) 

    Iceland understands that people respond to incentives. If there are strong incentives to bank irresponsibly, such as bailouts and few new regulations, then folks are going to continue to bank irresponsibly. If the consequence for scuttling an economy is prison, you're going to see fewer people follow the patterns that led to the Great Recession. 

    Meanwhile, in the United States:

    "Not one single banking executive has been charged with a crime related to the 2008 crash and U.S. banks are raking in more than $160 billion in annual profits with little to no regulation in place to avoid another financial catastrophe."

    Read more at US Uncut.

    For more on the economics of incentives, we recommend watching our videos featuring Freakonomics' Stephen Dubner.


    Robert Montenegro is a writer, playwright, and dramaturg who lives in Washington DC. His beats include the following: tech, history, sports, geography, culture, and whatever Elon Musk has said on Twitter over the past couple days. He is a graduate of Loyola Marymount University in Los Angeles.You can follow him on Twitter at @Monteneggroll and visit his po'dunk website at

    Photos: OLIVIER MORIN/AFP/Getty Images

    ​There are two kinds of failure – but only one is honorable

    Malcolm Gladwell teaches "Get over yourself and get to work" for Big Think Edge.

    Big Think Edge
    • Learn to recognize failure and know the big difference between panicking and choking.
    • At Big Think Edge, Malcolm Gladwell teaches how to check your inner critic and get clear on what failure is.
    • Subscribe to Big Think Edge before we launch on March 30 to get 20% off monthly and annual memberships.
    Keep reading Show less

    Why the ocean you know and love won’t exist in 50 years

    Can sensitive coral reefs survive another human generation?

    • Coral reefs may not be able to survive another human decade because of the environmental stress we have placed on them, says author David Wallace-Wells. He posits that without meaningful changes to policies, the trend of them dying out, even in light of recent advances, will continue.
    • The World Wildlife Fund says that 60 percent of all vertebrate mammals have died since just 1970. On top of this, recent studies suggest that insect populations may have fallen by as much as 75 percent over the last few decades.
    • If it were not for our oceans, the planet would probably be already several degrees warmer than it is today due to the emissions we've expelled into the atmosphere.
    Keep reading Show less
    Image source: Topical Press Agency / Getty Images
    Politics & Current Affairs
    • Though we know today that his policies eventually ended the Great Depression, FDR's election was seen as disastrous by some.
    • A group of wealthy bankers decided to take things into their own hands; they plotted a coup against FDR, hoping to install a fascist dictator in its stead.
    • Ultimately, the coup was brought to light by General Smedley Butler and squashed before it could get off the ground.
    Keep reading Show less

    Health care: Information tech must catch up to medical marvels

    Michael Dowling, Northwell Health's CEO, believes we're entering the age of smart medicine.

    Photo: Tom Werner / Getty Images
    Sponsored by Northwell Health
    • The United States health care system has much room for improvement, and big tech may be laying the foundation for those improvements.
    • Technological progress in medicine is coming from two fronts: medical technology and information technology.
    • As information technology develops, patients will become active participants in their health care, and value-based care may become a reality.
    Keep reading Show less