Part 3/9:
By the end of 2008, Iceland's external debt surged dramatically to over $53 billion, escalating its debt per capita to staggering levels. Aimed at modernizing the nation’s economy, the financial sector had inadvertently morphed into a ticking time bomb. As the crisis unfolded, Iceland's government chose an unorthodox path, refusing to bail out failing banks. Instead, it allowed these institutions to fail, which was historically controversial and led to clashes with foreign governments over deposit guarantees.