26 August 2010
Snorri Örn Árnason
In the midst of a global economic recession the Icelandic economy is in crisis after a series of bank failures. As suspicions of economic criminality have increased, a special prosecutors office has already undertaken the complicated task of investigating cases connected to the banking collapse. This paper examines the development of the Icelandic business environment and takes a look at recent trends in economic crimes in Iceland. In a short period in which Iceland entered the European Economic Area, great changes took place and power shifted from the political arena to the large corporations. The speed with which these developments took place, created unclear guidelines and left the regulatory agencies struggling, facilitating a poor corporate culture.
The project analyses the role of different regulatory agencies and the function of the system as a whole. Since the privatization of the banks in 2002, deregulation has made it difficult for the regulatory agencies to sustain a firm supervision of the markets. Very little co-operation between different authorities have further hampered investigations and prosecutions of economic crimes. To conclude, this project proposes crime preventative measures to improve the regulatory system in Iceland, taking a look at successful programs in other Scandinavian countries.