Financial Stability in Iceland

Abstract

There has been good and bad news for the Icelandic economy. The good news is that it is receiving a lot of attention. The bad news is that it is receiving a lot of attention. Recent volatility in Iceland’s asset markets have raised concerns about the fragility of Iceland’s economy. In this respect many have looked to the country’s large current account deficit. This study provides a framework for evaluating financial fragility by examining the fundamentals of Iceland’s economy to see whether they suggest that the country could go down the traditional routes to financial instability. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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