So in other words - in the US, bankers fuck up and the government has to pay for it. In China, the government fucks up and bankers have to pay for it. A strange world we live in.
Why Iceland ? There the government fucked up as much as the bankers, and then used their power to make the bankers alone pay for it ...
Lots of people consider what happened there good because with our western view bankers never pay for their mistake and they do in iceland, blissfully ignoring the action from their government that triggered them and helped them get there.
Probably because it seems that I was misinformed about Iceland, believing what you say lots of people believe. Then again, it still looks like they're better. They at least jailed half of the responsible parties.
It is not my area of expertise and I wouldn't want to go much into it at the risk of misinforming (although there is a detailed wikipedia page which could be a decent starting point), but at the very least should be considered the fact that when Icelandic banks started being too big and other countries warned Iceland and refused to allow some acquisitions, their government went out of their way to guarantee all deposits in Icelandic banks, even of non Icelandic citizen. When things went wrong, they then went back of that promise, paid deposits to their citizen and ignored the others.
At their height, the Icelandic banks possessions was worth eleven times the GDP of Iceland, and were in part fueled by promise of their government to other countries, promise that they went back on the moment things went south.
Imagine if another country did that to yours, say a Chinese bank buy a bank where your country's citizens have deposits and then the chinese govenment reneg their promise and let creditors in your country either lose their money or be repaid by your own government, would you consider the chinese government "the good guys who stood up to bankers" ?
> On 6 October, the Icelandic legislature instituted an emergency law which enabled the Financial Supervisory Authority to take control over financial institutions and made domestic deposits in the banks priority claims. In the following days, new banks were founded to take over the domestic operations of Kaupthing, Landsbanki and Glitnir. The old banks were put into receivership and liquidation, resulting in losses for their shareholders and foreign creditors. Outside Iceland, more than half a million depositors lost access to their accounts in foreign branches of Icelandic banks. This led to the 2008–2013 Icesave dispute, that ended with a ESA ruling that Iceland was not obliged to repay Dutch and British depositors minimum deposit guarantees.
> In 2001, banks were deregulated in Iceland. This set the stage for banks to upload debts when foreign companies were accumulated.
> his inflation was exacerbated by the practice of the Central Bank of Iceland issuing liquidity loans to banks on the basis of newly issued, uncovered bonds effectively, printing money on demand.
> In response to the rise in prices – 14% in the twelve months to September 2008, compared with a target of 2.5% – the Central Bank of Iceland held interest rates high (15.5%). Such high interest rates, compared with 5.5% in the United Kingdom or 4% in the eurozone for example, encouraged overseas investors to hold deposits in Icelandic krónur, leading to monetary inflation: the Icelandic money supply (M3) grew 56.5% in the twelve months to September 2008, compared with 5.0% GDP growth
Again, not saying the bankers weren't responsible. They were. But I don't like the praise to how the icelandic government handled it because they were just as responsible and then turned around and beat their accomplice while trying to make themselves appear the good guys.
It's probably worth noting that the government which went out of their way to guarantee all deposits in Icelandic banks, even of non Icelandic citizen. When things went wrong, they then went back of that promise, paid deposits to their citizen and ignored the others all (?) resigned and many members up to and including the Prime Minster[1] were charged and convicted of offenses relating to their behavior before and during the crisis.
Well if it is so, it shows that in the U.S. the bankers have the power to fuck things up and the government has the money, while in China it is the opposite. I wonder if Chinese way could actually be closer to what should be expected from banks and governments.
In case of Chinese bankers, I didn't mean "pay for this" in the literal sense. To quote the comment I responded to,
> to justify this crash, quite a lot fund managers are now in prison, who became the scapegoat for the government--the real one initiated all this mess.
I guess I'll be moving to Iceland.