Part 3/11:
Simultaneously, the government privatized its three largest banks, marking the start of an unprecedented financial deregulation experiment. Over five years, these banks, which had previously operated primarily within Iceland, borrowed an astonishing $120 billion— ten times the size of Iceland's economy.
The Financial Bubble
During the financial boom, bankers began showering themselves with money, while the economy experienced unnatural growth. Stock prices inflated, house prices more than doubled, and luxury imports surged. The realization of financial irresponsibility became evident when the Icelandic economy entered a bubble driven by rampant speculation and unethical lending practices.