The unprecedented restructuring of the Icelandic banking system took seven years and hundreds of lawyers. Never before has the fate of a nation been so heavily wedded to the outcome of a private insolvency.
In 2007, the total assets of Iceland’s three largest banks—Glitnir hf, Kaupthing Bank hf and Landsbanki hf—were worth more than 14 times the total gross domestic product of the country, which has just 330,000 inhabitants. When the trio collapsed the following year in the global financial crisis, they threatened to bring down the entire Icelandic economy.
