Iceland and the International Monetary Fund was to stem capital outflows, to restore confidence in the Icelandic economy and to thus stabilize the Icelandic Krona (ISK) 2008–2011 Icelandic financial crisis. Measures adopted by Iceland included an emergency nationalization of the failing banks, a vote of the Icelandic parliament gave the FME (Icelandic Financial Supervisory Authority) broad authority over the insolvent banks. FME proceeded to audit these banks and to split their assets. Measures were also introduced to increase the minimum capital adequacy ratio of the banks to 10% as a part of the effort to re establish confidence in the economy. As a part of these
Monetary-disequilibrium theory Monetary-disequilibrium theory Monetary disequilibrium theory is a product of the Monetarist school and is mainly represented in the works of Leland Yeager and Austrian macroeconomics. The basic concept of monetary equilibrium (disequilibrium) was, however, defined in terms of an individual's demand for cash balance by Mises (1912) in his "Theory of Money and Credit". Monetary disequilibrium is one of three theories of macroeconomic fluctuations which accord an important role to money, the others being the Austrian theory of the business cycle and one based on rational expectations. Leland Yeager's (1968) understanding of the monetary disequilibrium theory begins with fundamental properties