Iceland Blames Former PM for Financial Crisis

The trial of Iceland’s former prime minister for negligence leading to the 2008 financial crisis began on Monday in the capital city of Reykjavic.

Geir Haarde, prime minister from 2006 until 2009, is accused of having failed to rein in banks as they took on risky investments that ultimately led to the failure of the country’s top three banks at the end of 2008. The crisis forced the country into borrowing $10 billion and caused an ongoing dispute with Britain and the Netherlands over $5 billion in losses to foreign investors.

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Haarde pled ‘not guilty,’ saying the charges were preposterous. “None of us realized at the time that there was something fishy within the banking system itself, as now appears to have been the case,” Haarde added. The state took control of the nation’s largest banks after the credit crunch, letting the international businesses go bankrupt.

Prosecutors in the case say that the government failed to put in place the proper safety measures, allowing banks to get too big and saddling tax payers with excessive bailout debt. If convicted, Haarde could be sentenced to up to two years in prison.

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