Go Iceland! Good luck to a people who put their self-respect before the opinion of the markets.
I hope the people of Iceland have the courage of their convictions and enough self respect to tell the ‘international markets’ to take their bonds and turn them into wallpaper.
The Icelandic banks were used, like quite a few others, as casinos for global fund managers to play global financial roulette. There were a few spinoffs for the Icelanders but the bulk of the money borrowed was invested in other countries. It is not a case that Iceland was rebuilt to 7-star standards and is now refusing to pay for the new houses and other infrastructure.
Let the bondholders pursue redress in the courts where the assets actually are. It is convenient for them to pursue the Icelandic banks but it is not realistic and it is not going to be fruitful.