1. How would you evaluate the banking system of Iceland based on what you saw in the video? In your opinion, why upon the audit review KPMG accounting firm found nothing suspicious in Iceland banks’ loan portfolio?

2. In your understanding, why housing price bubble occurred in the United States in the early 2000s? What triggered housing prices to rise so rapidly?

3. Based on the video, over the time span of the existence of the securities market, do professional accounting firms and rating agencies always manage to maintain a fair assessment of complex financial instruments, such as financial derivatives and CDOs on balance sheets of investment banks? Explain your reasoning.

4. Based on the video, explain the role of government in the financial system. What is government deregulation of the economy? Was the government responsible for the financial crisis of 2007-08? Explain.

5. Explain the process of Securitization Food Chain. How this system evolved out of a simple and traditional “Borrower-Creditor” system?

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1 Icelands financial system was enormous in comparison to the economy with reserves ten times GDP and reliance on aggressive foreign borrowing The krna began to spiral out of reach when the Icelandic ... View the full answer