Our book this month is called “Iceland’s Secret “ by Jared Bibler.
Jared is an American who worked on Wall Street as an analyst and trader. In 2004 after several trips to Iceland, he fell in love with the country and eventually sought employment in finance. His first role in Iceland was developing software that was used for asset management. He was finding the software development role to be a back room effort with little human interaction.
After this, Jared took a role at one of the three large banks in Iceland on their trading desk. It was a role for which he was well suited. His Wall Street experience had prepared him well. Never mind the fact that almost everything was being done in excel spreadsheets when proper databases simply did not exist.
Along the way Jared observed financial irregularities which he dutifully reported to his superiors and was given assurances that they were being handled. But the evidence showed that they were being swept under the rug. These days in Iceland were heady days. Private jets flew in and out of the island on a regular basis. Construction cranes were everywhere. The number of new units far exceeded any reasonable demand from the local population.
Jared quit his job at the bank days before the entire financial system collapsed.
The Icelandic crisis of 2008 was an earthquake that levelled the financial fortunes of a whole country.
Jared found a job at the regulator and was put to work investigating what happened. In a temporary cubicle erected in the old lunch room at the regulator, he set about trying to find out what happened, who did it, and who needed to pay for it.
Six months into his new job, trading patterns for one of the banks on a single day showed what appeared to be unlimited buying from a single trader who bought all the shares that day in one of Iceland’s banks. It was a market with only one buyer. Further investigation showed the same pattern the day before and the week before and then the month before that. The pattern of unlimited buying had been going on for years and it involved not one bank, but all three of Iceland’s largest banks.
Host: Victor Menasce