A popular story (especially on the more left-leaning sites (e.g. "Iceland has jailed 26 bankers, why won't we?", "Iceland Has Jailed 29 Bankers. Why Can’t the UK and US Do the Same?", or "Iceland has differed from the rest of Europe and the US by allowing bankers to be prosecuted as criminals") is that Iceland is pretty unique in having prosecuted and convicted the many of its bankers after the 2008 financial crisis.

But is that really a correct picture when one considers the large Icelandic banks that failed? The total number of bankers convicted (two dozen or so) may be [somewhat] impressive, and they certainly include the leadership of one large bank namely Kaupthing where the CEO, chairman of the board, and a majority shareholder were all convicted, basically for trying to prop up the bank's image with a fake sale to a Qatari investor (fake because the sale was actually paid for with a loan take from Kaupthing itself.) This already raises a question of how generalizable this conviction/prosecution was going to be to the other Icelandic banks that failed; although they may have had similar financing woes, it's not clear at all they fit the same (convictable) pattern of failed "resurrection" attempts.

As far as I could find out however, some other major Icelandic banks, although they had to be nationalized, "taken control of", etc., did not have their leadership convicted (or even prosecuted as far as I can tell). These include Glitnir and Landsbanki. Now it's possible my sampling is biased, so is there a breakdown of Icelanding bankers who were convicted by the bank they were from, in which the size/importance of this bank is outlined (e.g. capitalization, employees etc.)? Furthermore, were these other guys convicted high-up in the hierarchy at those banks?

Another way to ask this is: are the other convictions of bankers in Iceland merely padding up the stats with small fries? (Even in the US there were hundreds convicted for misusing bailout money. A top banker was also convicted in Ireland, namely the CEO of the Anglo Irish Bank, for a dubious & large transaction in the crisis aftermath, again to inflate the bank's balance sheet.) So basically I'm trying to figure out if some part of the media is selling an Iceland myth, but please dont' asnwer that wtih yes or no; I just want the more objective stats from the highlighted question.

  • I guess I don't understand the gist of the question. The people convicted were convicted, supposedly, for intentional misdeeds, not just because the banks failed. So why is it relevant that some other banks that failed did not have their leadership jailed? Also, if the idea of the meme is that people in Iceland (vs elsewhere) are being jailed for misdeeds that caused the financial melt-down, then misusing bailout funds would not be analogous. Commented Aug 13, 2018 at 20:40
  • @PoloHoleSet: The thinking behind "So why is it relevant that some other banks that failed did not have their leadership jailed?" is probably that they must have done something, but it wasn't investigated thoroughly enough. In Iceland there were some systemic, cimininogenic issues: favorite clients, cross-bank loans that were used to prop-up the sharer prices. There are several good analyses of this; a short one: uti.is/2018/06/… Commented Aug 13, 2018 at 21:24
  • And a long one: brookings.edu/wp-content/uploads/2018/02/… Frankly that would have been a better questions (what systemic issues affected Iceland's bank), but it didn't occur to me to "ask" that until I saw the answer... Commented Aug 13, 2018 at 21:26
  • "they must have done something" - There are a lot of banks and people that got dragged down once the markets crashed without intentionally defrauding anyone. Incompetence, generally, is not criminal. Take someone some of the larger firms that were 1) creating the financial instruments, 2) selling them to customers knowing they were risky, and 3) "shorting" the market, in expectation that they would fail. That is riddled with conflicts of interest and fraudulent behavior. The top management of banks following the herd off the cliff, OTOH, certainly should lose jobs, but that's not criminal. Commented Aug 14, 2018 at 16:45
  • Of course, you may be onto something, and my view may reflect my own suffering from permanent cynical low expectations in regards to corruption and accountability. Maybe that's why I'm more impressed by Iceland. Commented Aug 14, 2018 at 16:47

1 Answer 1


I found a partial breakdown of the cases, unfortunately it's in the form of an interview with their prosecutor. I'll also quote his premises:

"In the beginning, we thought we may find something that was linked to the bank collapse itself; someone trying to take his chances because of the confusion of the crisis. But what came up was that many of the cases that we investigated stretched back several years.

"It was difficult to decide the difference between criminality and crazy banking, but we were more focused on how they gave their loans out; if they followed proper procedures. If they didn't, that was an indication of some wrongdoing."

As for some cases highlighted (clearly these are not all)

"We had an inside fraud case, and a manager in the Ministry of Finance received two years' imprisonment. Then we had the Exeter Case. The CEO of that bank and the chairman got four and four and a half years' imprisonment.

This is pretty confusing; older news said the CEO was acquitted there's no Wikipedia page for him; maybe he was retried. Wikipedia does have a page for the bank called MP Bank, but it mentions neither its legal troubles nor its size in a quantifiable way.

"We had an inside fraud case [which got] 12 months' imprisonment; breaches on the Company Act [which got] six and eight months' imprisonment and the lawyer was revoked.

No names or bank mentioned in there.

"Then we had a market manipulation case and fraudulent loans case connecting to Landsbanki. They got three and a half years.

Ok, someone at the big Landsbanki got convicted; Wikipedia does mention the case. So I can't tell at what level of the bank's hierarchy the convicted employees worked.

"The CEO for all of the Banki (Icelandic banks) received 18 months, and one of the brokers received nine months. Then we have the BK case. Four were found guilty: two received four years, one received three and one received two.

Another CEO in the bin. It seems that of Íslandsbanki, but Wikipedia again doesn't confirm the conviction too clearly (it says something about Ig Nobel Prize.) A somewhat smaller bank than Landsbanki but still significant.

I can't tell what the "BK case" was.

That's what I found so far. So more bank CEOs convicted than in other countries, it seems. Three (that I now know of) if we include that of Kaupthing (which I mentioned in the question).

A case of Wikipedia actually having the right info but on a different page:

  • Glitnir
    • President of Glitnir, 8 months suspended sentence for tax non-compliance
    • Managing Director of Markets of Glitnir, 9 months for insider trading (some of the sentence suspended)
    • Managing Director of Corporate Banking, sase as above but for breach of trust.
    • CEO, exactly as the above
  • the Landsbanki guys were

    • President, 3.5 years (wiki not clear for what)
    • Managing Director of Corporate Banking, 18 months
    • Managing Director of Brokerage: 9 months (6 suspended) for market manipulation
  • MP Bank's President, indeed convicted to 1 year (for breach of trust) after being acquitted twice.

  • the President of Byr Savings Bank, 4.5 years again for breach of trust.

  • Chairman of Exista, 8 months (5 suspended)

  • Chairman and President of FL Group (a private investment bank); appeal pending?

  • Kaupthing: Chairman: 4 years, Major shareholder 4.5 years, President 5.5 years, President of the Luxembourg branch, 4.5 years

So it does look like mamy major banks' leadership were hit with convictions. The three main banks in terms of assets were indeed Kaupthing, Landsbanki, Glitnir:

At its zenith, shortly before the banking collapse in 2008, the consolidated financial assets of the three big banks (Glitnir, Kaupthing and Landsbanki) were over nine times the size of Iceland’s GDP (Dwyer 2011).

And more relevant to question:

The three largest banks in Iceland [...] accounted for over 95 percent of the country’s banking system.

  • 1
    Question is, why and how would these examples count? Tax non-compliance and insider trading have nothing to do with financial crisis, other than the Al Caponeish effect (they wanted to convict anyone, for political goals to placate people, so they seized on any random violation of law they could dig up; with financial crisis investigation being a convenient method to dig up such violations)
    – user4012
    Commented Aug 13, 2018 at 7:16
  • 1
    @user4012: "insider trading have nothing to do with financial crisis"... It did in Iceland. Maybe you want to ask a new/separate question about that, along the lines of "What caused Iceland's bank crisis?" See some analyses I linked under the question in reply to PoloHoleSet. Commented Aug 13, 2018 at 21:45
  • 1
    @user4012: see in particular pp. 228-230 in the last link for how insider trading was related. Here's a snippet: "The banks could not own these [meaning their own] shares due to rules that limited ownership of own shares, so they sold them over the counter, outside the stock exchanges, to holding companies, which were often owned by insiders or large customers. These sales were frequently coupled with a loan amounting to the full purchase price of the shares. The only collateral for the loan were the shares themselves (SIC, chap. 12)." Commented Aug 13, 2018 at 22:05
  • 1
    "The SIC report goes step by step over a number of these deals, which were obviously made in an attempt to manipulate the banks’ market price. Additionally, this process increased systemic risk, as the equity of the banks became fictional, and thus it lost its loss-absorbing capacity. The managers of two of the three banks have been found guilty by the Icelandic Supreme Court of market manipulation, and the third case is now being prosecuted." And they mention cases outside Iceland like that... including the Anglo Irish Bank, whose CEO was also convicted. So Iceland was that x3. Commented Aug 13, 2018 at 22:10
  • wow! OK, that should definitely be in the answer!
    – user4012
    Commented Aug 13, 2018 at 22:24

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