The place where the global crisis, culminating as a result of 30 years of cheap money, began, Iceland, may well be the place which sees the first ever criminal conviction stemming from the Depression v2. Globe and Mail reports that Iceland's former prime minister has been referred to a special court, which could make him the first world leader to be charged in connection with the global financial crisis.
Lawmakers voted 33-30 to refer charges against former prime minister Geir Haarde for allegedly failing to prevent Iceland's 2008 financial crash that toppled the government, brought protests and crippled the national currency.
The special court has never before been convened. The court handles cases in which the parliament, the Althingi, decides to act against ministers on their handling of duties.
Mr. Haarde, former prime minister and ex-leader of Independence Party, is no longer in parliament. He did not run in the 2009 elections.
Iceland, a volcanic island with a population of just 320,000, went from economic wunderkind to fiscal basket case almost overnight when the credit crunch took hold.
After dizzying economic growth that saw banks and companies in this tiny Nordic nation snap up assets around the world for a decade, the global financial crisis wreaked political and economic havoc in Iceland. Its banks collapsed within a week in October, 2008.
Frankly we couldn't care less about Mr. Haarde. We are confident he will get his just deserts. What we would like to know is when will someone finally charge his "advisor", former New York Fed, and current Columbia professor Fred Mishkin, in the Hague, for hate crimes against world leverage, and for providing precisely the advice followed by the Iceland PM, that resulted in not just the collapse of the tiny Volcano-riddled country, but was the first domino to set off the discovery that all of the European periphery is now completely and totally insolvent. We refer of course to Mr. Mishkin's 2006 report "Financial Stability in Iceland" in which the then-Fed member observes: "The economy has already adjusted to financial liberalization, which was already completed a long time ago, while prudential regulation and supervision is generally quite strong." Less than two years later the country was bankrupt.
For much more on Mishkin's involvement in the financial crisis, we can not recommend enough the upcoming movie Inside Job, which destroys not only Napoloen Dynamite Sr.'s reputation, but that of his current boss, the Dean of Columbia Business School, one Glenn Hubbard, in a way that has to be seen to be believed.
The clip below is from Inside Job.