A Debt-Free State; Isolated and without Credit

Gudrun Johnsen

Chapter Chapter 15 in Bringing Down the Banking System, 2014, pp 179-188 from Palgrave Macmillan

Abstract: Abstract In early 2003, the three Icelandic banks had inherited a good credit rating from the virtually debt-free Icelandic state (4.4 percent of GDP net debt), which allowed their borrowing to go into high gear.1 By early 2008, however, the Icelandic state was inheriting the bad credit ratings of the banks.2 In just three months, the credit default swap (CDS) rate on Icelandic sovereign debt climbed twenty-fold, from 11 basis points in November 2007 to above 200 in February 2008 (Figure 15.1).

Keywords: Central Bank; Credit Default Swap; Foreign Exchange Reserve; Credit Default Swap Spread; Central Bank Governor (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1057/9781137347350_15

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