Global Financial Crisis (2008–2009)
Background and Market Impact
The reason I chose Iceland as a country case study for the global financial crisis is that I studied Iceland in my book, The Wandering Investor, and it was one of the hardest hit countries during this crisis. Leading up to the global financial crisis, Icelandic banks were offering international investors higher interest rates than could be received in their own domestic countries to achieve further growth. Iceland was offering interest rates as high as 18 percent, which encouraged carry trade, where investors borrow in a lower interest rate currency and use the proceeds to buy higher interest rate currencies. As would happen in the United States, a housing bubble ...
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