Icelandic Bank System "Will Be Unlike the Old One" - The Reykjavik Grapevine

Icelandic Bank System “Will Be Unlike the Old One”

Published March 31, 2009

Finnish economist Kaarlo Jännäri, who has lent his services to the
Icelandic government in renewing the economy, has laid out a basic
groundwork for Iceland’s new banking system. Furthermore, Jännäri considers it very likely that Iceland will join the EU and take up the euro within the next five years.
“It’s difficult to predict much about the economic future of Iceland” Jännäri told Morgunblaðið “but I consider it very likely that Iceland will join the European Union and take up the euro within the next five years or so. That would alleviate this problem of a small and unstable currency.”
Jännäri believes the roots of the economic collapse lie in many factors, among them poor bank management, bad policy, and just plain bad luck. Among his solutions are the reduction of the size of ministries, a streamlining and strengthening of Iceland’s financial management, and to create legislation which enacts stricter rules with regards to high-risk investments.
Jännäri was chairman of Finnland’s Economic Supervisory Commission for 11 years, was one of his country’s central bank chairman, and has himself managed a private bank. He has also worked in an advisory capacity with the IMF.

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