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
Economic history of Iceland the first year – 2009 – allowing fiscal multipliers to counteract the output contraction that was underway. Iceland also was not asked to downsize its Scandinavian-type welfare system." Iceland is the only country in the world to have a population under two million yet still have a floating exchange rate and an independent monetary policy. 2008 Financial Crisis and Recovery: Economic history of Iceland The economy history of Iceland covers the development of its economy from the Settlement of Iceland in the late 9th century until the present. According to a 2011 review study by economic historian Guðmundur Jónsson, "Economic