How Iceland stalks its “neo-Vikings” of finance, responsible for the crisis

Olafur Hauksson, special prosecutor to investigate the crisis.
Olafur Hauksson, special prosecutor to investigate the crisis. |

Today, the size of his catch has changed. Since January 2009, he sought and prosecuted those who played a role in the country’s economic collapse in 2008. A key position in this country of 320,000 inhabitants, less than the population of two arrondissements.


Until the summer of 2008, yet economists were effusive in his praise of the “miracle” Icelandic. Launched at high speed in an unbridled liberalization, “Iceland should be a model for the world” in 2007 and claimed the theorist of the supply-side economics, Arthur Laffer, famous for curve that bears his name. Privatization of its financial sector, merger of investment banks and commercial banks, deregulation of the labor market: Icelandic society is fast becoming a haven for investment. Doped with cheap credit, the Icelanders are surf in Morocco then considered the people “the happiest in the world” , as ranked by the World Database of Happiness.

But at the end of summer 2008, the Icelandic bubble bursts, the result of U.S. subprime crisis. Two weeks after the precipitous decline of Lehman Brothers, the three main banks, whose value represents 923% of GDP, are collapsing. The small island in the middle of the North Atlantic is swept by the crisis, the Icelandic krona sinks without any intervention may influence its course. October 6, 2008, live on national television, Prime Minister of the day ended his speech by asking God to “save Iceland” .


Since that fateful day, Iceland has experienced troubled days. In 2009, Icelanders, yet unaccustomed to social demonstrations, shouting their anger against the politicians and the “neo-Vikings” of finance who have deceived them. The “revolution pans” led to the resignation of Parliament and the Conservative government. Among the claims of this movement, is the judgment of those who have benefited from the economic situation and that pushed Iceland into the economic abyss.

The” revolution pans “had mobilized several thousand people in the capital, a feat across this small country of 320 000 inhabitants. | AFP / HALLDOR KOLBEINS

early elections are the left in power. New Prime Minister Johanna Sigurdardottir wants to quickly appoint a special prosecutor to investigate the causes of the crisis. But applications are not rushing to fill the position.


In this society so narrow, the small circle of professionals who would have been entitled to the function were themselves too involved in the system to try him. The son of former Minister of Justice himself was example the CEO of Kaupthing, one of the three banks at the heart of the storm.

Olafur Hauksson

, isolated in his small provincial police, had the merit of having no connection with this elite accused of precipitating the island toward bankruptcy. Despite his inexperience in complete economic justice, it will be the only one to propose for the post. A candidate not quite spontaneous: the trout fisherman Sunday sold at the kind urging of his government. So much so that his appointment, the fiercest conspiracy theorists have even accused the authorities of Iceland have chosen an inexperienced attorney to derail investigations.


More than three years after his appointment, Olafur Hauksson recognizes himself “not only recently started to feel good about its function” . First at the head of a team of five people, it now runs more than one hundred employees. “An exceptional, especially in an era of fiscal restraint,” said the prosecutor. To support him in this mission, the Special Prosecutor also received the help of international experts, including the French Eva Joly.

Their task is twofold: “On one hand, it is to investigate all suspected fraud and offenses committed before 2009, on the other, we commit ourselves to lawsuits against the alleged perpetrators. “ A method ” completely new “ which allows investigators to ” track records “, and justice, of ’em > “know the business on the fingertips.” A prerequisite “in order to compete with defense attorneys very prepared.”

Fridjonsdottir Sigridur, prosecutor at the trial of Geir Haarde.
Fridjonsdottir Sigridur, prosecutor at the trial of Geir Haarde. | AFP / HALLDOR KOLBEINS


To facilitate the mission of the prosecutor, the government has made legislative changes to banking secrecy. “Today we have access to all information, no objection can says Olafur Hauksson. Suspicion of bank fraud, insider trading, fraud, identity theft professional, embezzlement, investigations are varied and the three – almost four – interrogation rooms are full. The prosecutor said today work on “one hundred priority issues” .

Most people involved are former officials of the financial sector, members of boards of banks before the crisis. Icelanders who have often been chosen to go into exile in foreign countries – particularly in Luxembourg – to pursue their careers. A scattering, which complicates the task of the prosecution team Hauksson. But it multiplies searches and does not preclude further investigations in foreign subsidiaries of Icelandic banks, including from foreign nationals. “We have a full international cooperation,” Olafur Hauksson said.


To date, few convictions have been handed down. Two former executives of the bank Byr, first to have been tried, sentenced to four and a half years in prison. The former chief of staff of the Finance Minister at the time of crisis, Baldur Gudlaugsson, was convicted of insider trading in two years in prison. More recently, Sigurdur Einarsson is former president of the bank Kaupthing, which was ordered to repay the bank 500 million ISK – 3.2 million – and has seen all his assets frozen.

Others are still waiting to go to court. Jon Thorsteinn Oddleifsson, the former treasurer of Landsbanki, will soon know his fate, like Larus Welding, former CEO of Glitnir Bank.

IF Geir Haarde

In September 2011, Iceland became entranced by the trial of his former Prime Minister Geir Haarde, accused of “gross negligence” in managing the financial crisis and “violation of the laws on ministerial responsibility.” Lawyers for the former prime minister pleaded inability to hold him responsible for any mistakes made by others, including former trade minister at the time.

>> Read: “Iceland: the former prime minister, guilty only of the crisis?”

A winning strategy, as Geir Haarde has been convicted of only one of four counts: not having Ministerial Meeting convened in due course to discuss of the situation. Yet the prosecutor had requested the maximum sentence of two years in prison against former prime minister, who has escaped punishment.

Former Prime Minister of Iceland, Geir Haarde, during his trial.
Former Icelandic Prime Minister Geir Haarde during his trial. | AFP / Thorvaldur Orn Kristmundsson

“Geir Haarde’s case showed all the limitations of agadir surf such a judicial system,” analyzes the political scientist Erlingsdottir Rosa, professor at the University of Reykjavik. “Can we judge the decisions of a politician in office and ask for accountability? It was all matter contained in this trial, and the response of Justice has disappointed many Icelanders. ”


work of Olafur Hauksson indeed arouses strong criticism in the population. “The judicial time is relatively long for the public,” recognizes the prosecutor. This “chronic impatience” evoked by the political scientist Erlingsdottir Rosa is additional pressure to the Special Prosecutor’s Office. “We know that the eyes are on us, we must not fail” says Olafur Hauksson, but “speed things would invariably make mistakes and in the current context with so much distrust of institutions from the Icelanders, more than ever we must be above reproach. “


difficult to be “perfect” in a society where questionable practices have long been the rule. In May, two members of the prosecution team and have sold information to ISK 30 million (191,000 euros) to a mysterious recipient. These two former police officers investigating the case Sjovar / Milestone, an insurance company in which the Icelandic Central Bank had invested before giving back its shares for a lesser amount. Accused of violating the confidentiality of their function, the two men were hung to compulsory retirement. Olafur Hauksson said in the press Icelandic “take the matter very seriously” and fears a “deterioration of the credibility of his team” .


Other voices are criticizing the fact that the prosecution team “hounds scapegoats run while leaving the real culprits,” notes Thoroddur Bjarnason, professor sociology at the University of Reykjavik. The case of David Oddsson is the most emblematic.

conservative prime minister from 1991 to 2004, surf in Morocco then director of the Central Bank of Iceland from 2005 to 2009, he was one of the main actors of the economic transformation of the island, with its neo-liberal think tank, “The locomotive “. At the head of the country, he was behind a series of privatizations of the economic sector. In 2002, it is he who dissolved the National Economic Institute of Iceland, regulatory authority renowned for its independence, and never rely solely on departmental analysis and research of banks themselves.

Yet today, no charges were brought against him, David Odsson even became the editor of the leading newspaper in Reykjavik, Morgunbladid . “A bit like Richard Nixon had appointed to head the Washington Post during Watergate” , says the diplomatic World .

Front of the Icelandic central bank, in October 2008.
Facade of the Icelandic central bank, in October 2008. | AFP / OLIVIER MORIN

“purge” of the Icelandic financial system, as likes to say Olafur Hauksson, will not be immediate. If he expects an end of mission in 2015, the prosecutor especially hope that Iceland, whose economy has gradually resumed, may one day “look behind her, and be proud to have known learn from the past. “

For the former Commissioner, the mission is already “a success”. “I know of no example of a procedure similar conduct in the world, and our work showed how the banking system that was implemented was a far cry from that we imagined it. “ This observation also applies to the former Commissioner of the small fishing port of Akranes.


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