iceland economy

hands tiedTC

Cyprus and Iceland: a tale of two capital controls

LONDON | March 6, 2015 | By Sigrún DavídsdóttirBoth in Cyprus and Iceland foreign funds flowed into the islands, in the end forcing the government to make use of extreme measures when the tide turned. These measures are normally called ‘capital controls’ which in these two cases hides the fact that the measures used are fundamentally different in all but name. In Iceland, the controls contain the effect of lacking foreign currency, effectively a balance of payment problem – in Cyprus, the controls were a way of defending banks against bank run, i.e. preventing depositors to move funds freely.


How Iceland’s banking crisis fueled its startup boom

In the fall of 2008, the collapse of the Icelandic banking system sent thousands of promising young Icelanders into unemployment. Today, Iceland’s Generation Y is turning to entrepreneurship to dig out from under the country’s financial crisis.