## Iceland: Ex Post Evaluation of Exceptional Access Under the 2008 Stand-by Arrangement

_IMF Staff Country Reports, April 12, 2012_

## Source details

**Canonical URL:** [Iceland: Ex Post Evaluation of Exceptional Access Under the 2008 Stand-by Arrangement](https://www.imf.org/en/publications/cr/issues/2016/12/31/iceland-ex-post-evaluation-of-exceptional-access-under-the-2008-stand-by-arrangement-25855)

## Other formats

- [Markdown version](/en/publications/cr/issues/2016/12/31/iceland-ex-post-evaluation-of-exceptional-access-under-the-2008-stand-by-arrangement-25855/index.md)
- [Structured JSON version](/en/publications/cr/issues/2016/12/31/iceland-ex-post-evaluation-of-exceptional-access-under-the-2008-stand-by-arrangement-25855/index.json)
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## Bibliographic details
- Published: April 12, 2012
- Series: IMF Staff Country Reports

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### Overview
- The ex-post evaluation of Iceland’s Exceptional Access under the 2008 Stand-By Arrangement is presented.
- In the wake of the global financial crisis in late 2008, Iceland experienced a deep financial and economic crisis.
- Domestically, the rapid increase in lending fuelled bubbles in all asset classes, particularly the stock market and real estate.
- Inflated asset prices and nontransparent cross-financing and related party lending between banks and holding companies helped mask poor asset quality.
- These practices facilitated the financing of credit expansion by borrowing abroad, increasing vulnerability.

### Key findings and analytical points
- Rapid credit growth contributed to asset price bubbles in the stock market and real estate.
- Nontransparent cross-financing and related party lending obscured poor asset quality within banks and holding companies.
- Reliance on foreign borrowing to finance credit expansion heightened external vulnerability.
- The document presents an ex-post evaluation of the exceptional access provided under the 2008 Stand-By Arrangement in this context.

### Subjects and keywords
- Subjects:
  - Balance of payments
  - Banking
  - Capital controls
  - Commercial banks
  - External debt
  - Financial crises
  - Financial institutions
  - National accounts
  - Private debt
  - Public debt
- Keywords:
  - bad-bank approach
  - bank collapse
  - bank support
  - bank Support
  - banking system
  - banks business diversification
  - capital control
  - capital control liberalization
  - Capital controls
  - central bank
  - Commercial banks
  - control liberalization
  - CR
  - debt restructuring
  - exchange rate development
  - Global
  - government of Iceland
  - ISCR
  - monetary policy
  - overhang problem
  - policy option
  - post evaluation
  - Private debt
  - program projection
  - restructuring cost

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## Content in this bundle

- **Executive Summary — _cr1291**
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  - [Executive Summary — _cr1291 (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2012/_cr1291.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2016/12/31/iceland-ex-post-evaluation-of-exceptional-access-under-the-2008-stand-by-arrangement-25855_