The impact on the people

In Iceland, because of the rising interest rates, persons found it lucrative to borrow money on foreign markets and deposit in the local banks thereby, gaining higher interest rates there.  Because of this, Iceland saw common towns people for a lack of a better word, such as fishermen, ordinary tradesmen etc. being transformed into investors of sorts. They begin investing monies borrowed into the high yielding Icelandic banks with interest rates of over 10%. Before the crisis the interest rates averaged 9.4% and went as high as 18%, (IMF Report 2010). Therefore, it stands to reason that a lot of money can be made simply by depositing currency into their local banks.

Furthermore there was also a housing bubble because of the extended credit my Icelandic Banks. Homeownership increased and or persons decided to get larger accommodations they could not really afford in normal economic circumstances.

When the bubble burst and the Icelandic banks came crashing down, along with the closing of the Icelandic stock market, the people were in despair.They were left with higher taxes, decrease in spending, a period of repossessions and mortgages they could not afford. They took to the streets to protest and demand answers from their politicians and other persons in high authority. The people made the entire Government resign through mass protests as seen below. 

Source: www.therightperspective.org

Source: www.addictinginfo.org

Source: www.thedailybell.com

There was also a referendum held  as a result on the 20th October 2012, so that the people could decide upon certain economic decisions of which they won on all six questions posed. And most recently, the people are of the opinion that those responsible for such reckless decision making should be incarcerated. The new Government has then commenced an investigation to bring to justice those parties that were responsible for the financial crisis including past Government officials and bankers. Since then, many high ranking officals and bankers have been arrested.