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The combined collapse of Iceland´s three largest banks in 2008 is the third largest bankruptcy in history and the largest banking system collapse suffered by any country in modern economic history, relative to GDP. How could tiny Iceland build a banking system in less than a decade that proportionally exceeded Switzerland´s? Why did the bankers decide to grow the system so fast? How did businesses tunnel money out of the banking system? And why didn´t anybody stop them? Bringing Down the Banking System answers these questions. Gudrun Johnsen, Senior Researcher with Iceland´s Special Investigation Commission, tells the riveting story of the rise and fall of the Icelandic banking system, describes the Commission´s findings on the damaging effects of holding company cross-ownership, and explains what we can learn from it all.

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PART I: BACKGROUND 1. Illusion of Prosperity 2. Collapse 3. Panic 4. Investigation 5. Financial Liberalization PART II: HOW DID THE BANKERS DO IT? 6. Funding the Banks 1 7. The Geyser Crisis 8. Love Letters to the Rescue 9. Playing Tricks on the European Central Bank PART III: WHY DID THE BANKERS DO IT? 10. The Web of Ownership 11. Tunneling Money Through Related Party Lending 12. Market Manipulation and Falsification of Equity 13. Wages of Failure PART IV: WHY DIDN´T ANYBODY STOP THE BANKERS? 14. Funded By the Ill-Informed 15. Debt Free State, Isolated and Without Credit 16. Putting a Poodle on the Watch 17. What Have We Learned?

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Gudrun Johnsen is Vice Chairman of the Board of Directors at Arion Bank, Assistant Professor of Finance at the University of Iceland, and Research Associate in the Department of Private Law at the University of Oslo, Norway. She served as a Senior Researcher with Iceland´s Special Investigation Commission following the banks´ collapse.

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