Business, Finance & Economics

Iceland's economic meltdown

This toy store in the heart of London is owned in part by an Icelandic group and is backed by Icelandic banks. Today the Prime Minister of Iceland announced those banks will have to sell off foreign investments like this toy store and bring the much needed money back home. The government passed laws giving it the ability to avoid even more of a meltdown. Tiny Iceland has been flying high for years on the back of its banking industry, but this analyst says the crisis isn't the only reason to care about what's happening in Iceland, where they have a standard of life that's exceptionally high for Western nations so in some ways it's a model nation. But Iceland also stayed out of the E.U. and hung onto its own currency which the analyst says is a huge mistake. Now domestic borrowers are in big trouble and British depositors in Iceland can't get their money out and Iceland isn't guaranteeing their deposits.

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