David McWilliams: Too much regulation will stifle our banking sector
Published 08/06/2011 | 05:00
Yesterday the IMF published its fifth review of Iceland's economy since the crisis began. The IMF declared Iceland's economic progress "impressive" and disbursed a loan tranche of $225m (€136m).
Now if this sounds weird to you, it should do. This is the Iceland that defaulted on all its bank bondholders and this is the Iceland that the IMF warned would be cut off unless it paid all its foreign bondholders. Yet just two years later, the IMF declares that Iceland's progress has been "impressive" and lends the country money!
Does this sound strange to you? Did not our establishment laugh at the Icelanders and warn that Iceland was a "basket case"? We were told that we were going to be "protected" by the euro in the crisis. Nothing could be further from the truth. The fact is that the euro is now a straitjacket and, without room to manoeuvre, our economy will not recover. Meanwhile Iceland has its own currency, gave two fingers to the bondholders and is moving ahead "impressively".