ICELAND'S SECRET

Debut author Bibler offers an insider’s account of a banking scandal that roiled the Icelandic economy.

In 2004, the author moved from New York City to Iceland inan attempt to “escape the increasingly oppressive world of mortgage-boom Wall Street.” He found a job at Landsbanki, the country’s oldest financial institution, in portfolio management. Before long, he says, he discovered disturbing trading irregularities that compelled him, as a matter of conscience, to resign from the firm. In 2008, a major Icelandic banking crisis occurred—a catastrophic “earthquake that leveled the financial fortunes of a whole country,” as Bibler puts it. The country’s three major banks collapsed, the national currency followed suit, and many people’s savings were wiped out. After some lean times, Bibler was hired as an investigator by Iceland’s FME, the “financial regulator of the land,” and he writes of how he and his colleagues discovered an astonishing scandal—the three major banks, including his former employer, were buying up their own shares in order to artificially generate demand for them, effectively manipulating their prices. They then used shell companies both to conceal those shares and dispense loans made against their value. In the case of Landsbanki, he says, this unscrupulous practice dated back to 1998. The author captures the unseemliness and audacity of the gambit in memorable, vivid prose: “It would be something like as bad as if a supermarket owner, seeing that nobody is buying his well-rotted tomatoes, hired dozens of actors to queue outside his store, buying up his produce with the store’s own cash.”

Bibler is uniquely positioned to explain the scandal, as he assumes a dual perch as both an insider and an outsider. He not only captures the financial skulduggery in precise detail, moving seamlessly from nuts and bolts to big-picture analysis, but also depicts it as a cautionary tale—a case of “unregulated Wild West capitalism.” In this way, the book goes beyond a mere portrayal of a specific crime and its far-reaching ramifications and becomes a moral tale about the depths of human greed. It shows how, even in a nation as thoroughly egalitarian as Iceland, crimes of avarice are possible—especially when regulatory agencies are less than vigilant. Furthermore, he provides engaging insights into Iceland’s unique culture, including the difficulty of precisely assigning responsibility for wrongdoing: “the Icelandic language offers up a third, middle way of describing the making of a mistake as if it took place in a vacuum and never involved a living soul, the way electrons magically pop into and out of existence in the vastness of space….With it, Icelandic politics and business can seem magical worlds, bereft of human influence.” That said, Bibler’s account isn’t without its longueurs; his descriptions can be redundant, and the pace of the book, as a mixture of financial commentary and personal remembrance, is often languid. Nonetheless, it’s an admirably rigorous account of a complex event of great contemporary importance.

An accessible and thorough story of a nation’s financial collapse.