The 2008 Global Financial Crisis in Retrospect

1. Front Matter

   Pages i-xviii

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2. A Retrospective on the 2008 Global Financial Crisis

   • Robert Z. Aliber, Gylfi Zoega

   Pages 1-15

3. The Source of the 2008 Global Financial Crisis

   1. Front Matter

      Pages 17-17

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   2. The Financial Alchemy That Failed

      • Marcus Miller

      Pages 19-41

   3. Prudential Regulation and Capital Controls

      • Michael Dooley

      Pages 43-48

   4. Three Grand State Projects Meet the Financial System

      • Peter Garber

      Pages 49-55

   5. The 2008 GFC: Savings or Banking Glut?

      • Robert N. McCauley

      Pages 57-85

   6. Capital Flows into the United States Ahead of the Great North Atlantic Financial Crisis

      • Brad Setser

      Pages 87-109

   7. The Foreign Capital Flow and Domestic Drivers of the US Financial Crisis and Its Spread Globally

      • Jeffrey R. Shafer

      Pages 111-138

   8. Financial Crises and Bank Capital

      • Robert Z. Aliber

      Pages 139-155

   9. Three Reflections on Banking Regulations and Cross-Border Financial Flows

      • Edwin M. Truman

      Pages 157-173

4. Iceland and the 2008 Global Crisis

   1. Front Matter

      Pages 175-175

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   2. From a Capital Account Surplus to a Current Account Deficit

      • Hamid Raza, Gylfi Zoega

      Pages 177-189

   3. Lessons from the Icelandic Financial Crisis

      • Sigridur Benediktsdottir, Gauti Eggertsson, Eggert T. Thorarinsson

      Pages 191-207

   4. Iceland’s Capital Controls

      • Fridrik M. Baldursson

      Pages 209-226

   5. Wage of Failure: Executive Compensation at the Failed Icelandic Banks

      • Gudrun Johnsen

      Pages 227-256

   6. Financial Policy After the Crisis

      • Jon Danielsson

      Pages 257-279

   7. Business Cycles and Health: Lessons from the Icelandic Economic Collapse

      • Tinna Laufey Asgeirsdóttir

      Pages 281-295

   8. Ten Years After: Iceland’s Unfinished Business

      • Thorvaldur Gylfason

      Pages 297-325

   9. After 100 Years of Experimenting: One Solution?

      • Asgeir Jonsson

      Pages 327-348

 This book addresses the causes and consequences of the international financial crisis of 2008. A range of esteemed contributors explore developments in the United States, where the crisis of 2008 originated, as well as the smallest country affected, Iceland, by evaluating developments since 2008. Currently, many countries are facing similar problems as Iceland did in 2008: this book is of interest to economists and policy makers in these countries to study what happened in Iceland, and why the recovery of that economy was strong and swift. The chapters in this book originate from panel discussions and conferences and explore areas including regulation, state projects and inflation.

• Icelandic economy
• Origins of the 2007/2008 financial crisis
• Financial crises
• Small open economies
• US financial crisis
• Crisis and boom
• Banking crisis
• Currency crisis
• Asian crisis
• Regulatory response to financial crisis
• Financial market turbulence
• Capital flows
• Monetary Regimes
• Banking Regulation
• Cross-Border Financial Flows
• The Icelandic banking crisis of 2008
• Business cycles and health
• Post-crisis monetary policy reforms
• Inflation targeting
• Capital controls
• banking

• Booth School of Business, University of Chicago, Chicago, USA

  Robert Z. Aliber

• Department of Economics, University of Iceland, Reykjavik, Iceland

  Gylfi Zoega

Robert Z. Aliber received a Bachelor of Arts degree from Williams College (1952) and Bachelor of Arts (1954) and a Master of Arts (1957) from Cambridge University. He received his Ph.D. from Yale University. He has been a staff economist at the Commission on Money and Credit (1959–61) and at the Committee for Economic Development (1961–64). Aliber served as a senior economic advisor at the United States Agency for International Development (1964–65). He was appointed as an associate professor at the University of Chicago in 1964. He is best known for his contribution to the theory of foreign direct investment. He is the author of revised editions of Charles Kindleberger’s Manias, Panics and Crashes(Palgrave Macmillan).



Gylfi Zoega received his first degree at the University of Iceland and a PhD in economics from Columbia University in 1993. He is Professor of Economics at the University of Iceland and Birkbeck College, London, since 1993 and an external member of the Monetary Policy Committee of the Central Bank of Iceland. He has followed the financial crisis in Iceland and taken part in the recovery effort for the past ten years. In addition, he has written a number of academic papers on financial turbulence and capital flows and co-authored the book Preludes to the Icelandic Financial Crash in 2011.

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