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According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain
*As defined in Wikipedia

Friday, October 5, 2012

What Iceland Can Teach Us About Goldman Sachs

After having listened to Michael Enright's CBC Radio interview of the President of Iceland, Olafur Ragnar Grimsson, one can easily see that Iceland has a lot of important things to tell us about rogue banking and how to deal with it.

If Goldman Sachs had committed its fraud in Iceland, it would have been disgraced; the CEO, Lloyd Blankfein, would have been put in jail for 4.5 years and the bank would have been wound down.

The Icelandic people chose not to bail out their banks.  They did not fail their democracy and, instead, voted to hold the banks accountable for their failures and did not give in to pressure from the IMF, Britain and the Netherlands to  bail out their corrupt banks.  The President asked the citizens to vote on such a bailout and they rejected the idea.

Democracy came through; the banks were put into their proper place because they did not support the common good but only their own greediness.

So the best thing to do when banks fail is to let them fail.  What a concept!  Democracy can triumph.  The economy can be built back up when banks are put into their rightful subservient places as Iceland managed to do.  They have put two bank CEOs in jail; they have received investments from abroad and they have resurrected their economy over time.

The same thing could have happened in the US if the FDIC had been allowed to wind down all the TBTF banks that brought us the financial meltdown.  It had the ability to do just that if Bair had been given support from other regulators.  If the banks had been allowed to fail, the US would be well on its way now to a more robust economic recovery.

See the CBC Interview here


stevieb71 said...

More people need to read this.  I've watched a quite gripping, and thorough documentary on the tanking of the Icelandic economy - it would be great to watch one of similar quality about Iceland's recovery after prosecuting corrupt bankers...

Synir said...

Sorry you are misinformed, icelanders ARE paying big time. Very few knows the names of foreign hedge funds that own the icelandic banks.

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