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Fitch Raises Iceland’s Rating; Says “unorthodox crisis policy response has succeeded.”

23 Feb

Is it too late for the rest of the world to take a lesson from Iceland’s playbook?

This week Business Week reports that Fitch has raised the island’s rating to Investment grade while stating that their ““unorthodox crisis policy response has succeeded.”  Take that in.

The rating agency is essentially saying that protecting its citizens and holding the banks accountable for their bad behavior was the correct and successful approach to the crisis…  That the ‘citizen’s anger’ has ‘paid off.’

Too bad the rest of the world’s governments have not been wise enough to defend their citizens against the ruthless looters in the financial sector who continue, in all these other nations to wreak havoc upon the defenseless peoples of the world.

Ireland, Greece, the U.K. and the U.S. leaders might want to take another look at their own playbook and adjust their plan -if they had not already proven that they are merely pawns of the looters; that might be possible…

Icelandic Anger Brings Debt Forgiveness in Best Recovery Story

Feb. 20 (Bloomberg) — Icelanders who pelted parliament with rocks in 2009 demanding their leaders and bankers answer for the country’s economic and financial collapse are reaping the benefits of their anger.

Since the end of 2008, the island’s banks have forgiven loans equivalent to 13 percent of gross domestic product, easing the debt burdens of more than a quarter of the population, according to a report published this month by the Icelandic Financial Services Association.

“You could safely say that Iceland holds the world record in household debt relief,” said Lars Christensen, chief emerging markets economist at Danske Bank A/S in Copenhagen. “Iceland followed the textbook example of what is required in a crisis. Any economist would agree with that.”

In even more stunning language later on in the piece, an economics professor from the University of Iceland makes a clear case for the correctness of Iceland’s response to the crisis:

Crisis Lessons

“The lesson to be learned from Iceland’s crisis is that if other countries think it’s necessary to write down debts, they should look at how successful the 110 percent agreement was here,” said Thorolfur Matthiasson, an economics professor at the University of Iceland in Reykjavik, in an interview. “It’s the broadest agreement that’s been undertaken.”

Without the relief, homeowners would have buckled under the weight of their loans after the ratio of debt to incomes surged to 240 percent in 2008, Matthiasson said.

Read the full story including statements by Fitch concluding that Iceland’s approach has succeeded.

 

 

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