Well, of course the citizens played a key role. But it doesn't mean they weren't fleeced or foolishly lent to by sleazy, greedy bankers just like everyone else

Well, of course the citizens played a key role. But it doesn't mean they weren't fleeced or foolishly lent to by sleazy, greedy bankers just like everyone else in the Western world. Even if you hold these citizens fully accountable, at least in Iceland the people who so irresponsibly led themselves to financial ruin were bailed out, rather than the banks who so irresponsibly led themselves to financial ruin. "The analysis suggests that the share of indebted households in distress grew from 12½ per cent in early 2007 to 23½ per cent on the eve of the banking collapse in the autumn of 2008, when the lion’s share of the balance sheet shocks had already taken place. The extent of acute distress nearly quadrupled over the same period. Forbearance efforts provided temporary breathing space, but the share in distress is estimated to have peaked at 27½ per cent in autumn 2009, before declining to 20 per cent at yearend 2010 due to policy and legal interventions. Financial distress is found to be inversely related to income and age, as well as being higher among families with children and those with foreigndenominated debt than among childless couples and those with ISK-denominated loans only. Parents of every fifth child in Iceland were in distress at year-end 2010. The incidence of negative housing equity increased dramatically, from roughly 6 to 37 per cent of indebted homeowners, over the four-year period. Negative housing equity is more widespread among high-income than low-income households. The share of homeowners simultaneously in distress and negative equity rose from roughly 1 to 14 per cent but declined to 10 per cent by the end of the period. Middleincome families with children, most of which had foreign-denominated loans, and low-income singles seem especially vulnerable. Some of the seeds of households’ financial difficulties were sown by imprudent lending in 2007 and 2008, when 16 per cent of the total amount of new loans was granted to households already in distress. Up to 34 per cent of households in distress at yearend 2010 were granted loans in 2007-2008, when they were already financially distressed." http://www.cb.is/library/Skr%C3%A1arsafn---EN/Working-Papers/Working%20Paper%2059.pdf http://www.cb.is/library/Skr%C3%A1arsafn---EN/Working-Papers...