How Tiny Iceland Created A Global Financial Bubble, Leaving Wreckage Everywhere When It Popped

01/27/2009 05:12 am ET | Updated May 25, 2011
  • CHARLES FORELLE Wall Street Journal

A boy charged to the front of an angry crowd here recently and tossed a carton of skyr, a popular local yogurt-like snack, at the Parliament building. It splattered on the rough-hewn stone.

He and thousands of Icelanders were protesting one of the strangest economic failures of the global financial crisis. This past fall, every bank that matters in this tiny nation -- that is, all three of them -- failed. Iceland's currency, the krona, became worthless beyond its shores. The country's financial system stopped working.

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