In the decades before 2008, Iceland had a stable and prosperous economy, built on fishing, tourism, aluminium smelting and - to an extent that grew rapidly over time - financial services. Then, in late 2008, following the difficulties experienced by the country's major privately owned commercial banks in refinancing their short-term debt and a run on deposits in the Netherlands and the United Kingdom, the banking system and the Icelandic krona ("ISK") collapsed. Practically overnight, the three largest banks - Landsbanki, Kaupthing and Glitnir - which had built up assets fourteen times larger than the annual output of the entire Icelandic economy defaulted on a combined US$85bn of debt. And when Iceland’s massive banking sector toppled, the government was forced to impose capital controls to safeguard its economy. Read more.