Wall Street on the Tundra

Michael Lewis explains the causes and effects of Iceland's massive bankruptcy.

This in a country the size of Kentucky, but with fewer citizens than greater Peoria, Illinois. Peoria, Illinois, doesn’t have global financial institutions, or a university devoting itself to training many hundreds of financiers, or its own currency. And yet the world was taking Iceland seriously.

And suddenly, it all went wrong:

Global financial ambition turned out to have a downside. When their three brand-new global-size banks collapsed, last October, Iceland’s 300,000 citizens found that they bore some kind of responsibility for $100 billion of banking losses–which works out to roughly $330,000 for every Icelandic man, woman, and child.