Boyes’ Book on Bank Collapse Criticized

Street riots in Reykjavik after the 2008 bank collapse.

In the 2017 Spring Issue of the magazine Thjodmal, Professor Hannes H. Gissurarson, RNH Academic Director, published a long dissection in English of the book Meltdown Iceland by British journalist Roger Boyes. As the first full-length book on the 2008 Icelandic bank collapse, it shaped the views of many foreigners about this event. According to Boyes himself, who does not speak Icelandic, his most important sources in Iceland were the economists Thorvaldur Gylfason, Gylfi Magnusson and Katrin Olafsdottir. Gissurarson however points out many errors in Boyes’ book, trivial as well as important. For example, Boyes asserts that Landsbanki shareholder Bjorgolfur Gudmundsson’s father was director of an oil company, whereas in fact it was his father-in-law who had that position. The author also asserts that prominent lawyer Jon Steinar Gunnlaugsson became Chief Justice of the Iceland’s Supreme Court, which he never did.

In his paper, Professor Gissurarson analyses how Boyes repeats many myths thrown around by Icelandic journalists, often in imitation of their foreign colleagues, for example about an ‘octopus’ in control of the Icelandic economy until the 1990s. The truth of the matter was that the group referred to only controlled one of the ten biggest companies in Iceland; most other big companies were owned by the state, or by the cooperative movement, or they were marketing organisations for the fisheries. Boyes also tells a story about an encounter between Milton Friedman and Prime Minister David Oddsson whereas in fact they never met. Again, Boyes suggests that the publishers of Oddsson’s two collections of short stories (Olafur Ragnarsson and Petur Mar Olafsson) received political favours from him which Olafsson strongly denies on their behalf and of which no example has been produced.

Acording to Professor Gissurarson, Boyes repeats some misunderstandings of the Icelandic system of quotas in the fisheries, for example that the quota holders received something for nothing from the government. Gissurarson points out the general conclusion of fisheries economics that the only right of which others were deprived by confining fishing to quota holders was the right to harvest fish in the Icelandic waters at zero profit, which is by definition a worthless right. Boyes’ account of the Icesave dispute is also, Gissurarson submits, coloured by the views of the British Labour government which needlessly and brutally invoked an anti-terrorist law against Iceland in the midst of the financial crisis. Many other matters are discussed in the paper by Professor Gissurarson who is at present writing a report on the banking collapse for the Icelandic Ministry of Finance.

Paper in English by Gissurarson on Meltdown Iceland

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