Landsbanki

Landsbanki was an Icelandic bank that collapsed in October 2008 as part of a broader financial crisis in Iceland. The country's banking system had undergone privatization and relied heavily on foreign investment, leading to financial sector assets exceeding 1,000% of Iceland's gross domestic product (GDP).1

Landsbanki's collapse was triggered by a run on its Icesave online savings accounts, which offered high interest rates to customers in the United Kingdom and the Netherlands. When the Icelandic government guaranteed domestic account holders but not foreign ones, it led to significant losses for British and Dutch depositors. This event caused a diplomatic rift and a national bankruptcy declaration for Iceland, with its currency plummeting and stock market crashing. Iceland eventually secured a loan from the International Monetary Fund (IMF) after implementing austerity measures.12