Iceland Finance Movie

Inside Job, Charles Ferguson’s 2010 documentary, doesn’t focus specifically on Iceland, but the country plays a significant, and chilling, role in its narrative about the 2008 global financial crisis. The film meticulously dissects the systemic corruption and regulatory failures that enabled the crisis, and Iceland serves as a stark microcosm of those broader issues.

The film’s Iceland segment highlights the country’s rapid deregulation and privatization of its banking sector in the early 2000s. This deregulation, championed by a close-knit group of influential individuals, allowed Icelandic banks to expand aggressively, borrowing heavily on international markets and inflating asset bubbles. The film portrays these individuals as being closely tied to the government and wielding immense political power, creating an environment ripe for conflicts of interest and unchecked risk-taking.

Inside Job points out that the Icelandic banks grew to become disproportionately large relative to the country’s GDP. This created a situation where the failure of even one bank could bring down the entire Icelandic economy. The documentary interviews academics and journalists who warned about these dangers, but their concerns were largely ignored or dismissed.

As the global financial crisis unfolded in 2008, the Icelandic banking system collapsed. The krona plummeted, Iceland was effectively bankrupt, and the country faced a deep recession. Inside Job doesn’t shy away from showing the human cost of this collapse, illustrating the impact on ordinary Icelanders who lost their savings and livelihoods.

The film emphasizes the lack of accountability for the individuals responsible for the crisis. While some bankers faced minor charges, many of the key players walked away relatively unscathed. This lack of prosecution reinforced the perception that the financial system was rigged in favor of the wealthy and powerful.

The Iceland segment in Inside Job serves as a cautionary tale about the dangers of unchecked deregulation, the importance of independent oversight, and the need for accountability in the financial sector. While the film primarily addresses the US context, the Icelandic example demonstrates that these issues are global in scope and that the consequences of financial mismanagement can be devastating, especially for smaller economies.

Ultimately, Inside Job uses the Icelandic case to illustrate a broader point: that the 2008 financial crisis was not simply an accident or the result of unforeseeable events, but rather the consequence of deliberate policy choices and a culture of impunity that allowed reckless behavior to flourish.