Foreign Correspondent: Sept 22

Apparently we’ve arrived at the anniversary of the global financial crisis. Everybody please hold hands. You’re still here.

So tonight Foreign Correspondent will report on the most bizarre casualty of all – Iceland.

By the first week of October 2008 – just a few weeks into the GFC the country was broke after suffering the biggest banking collapse in history.

Now – one year on – Icelanders are wondering how a nation of fisherman thought it could become the new Wall Street and how they’re going to get themselves out of a diabolical mess.

Eric Campbell presents a tragi-comic story of stupidity, arrogance and fraud.

He reveals how government ministers were in bed with bankers to create what some call the biggest Ponzi scheme in history.

‘Some of the ministers from the government for example had very close ties with these banks and this was never really revealed properly,’ says independent MP Birgitta Jonsdottir. ‘How is it possible that they allowed the Icelandic banking system to grow ten times the size of our GDP? I mean how is that possible unless you have somebody looking the other way in order to make money out of it?

What’s more, officials across the Atlantic failed to heed warnings from Iceland that could have stopped the financial collapse. And there are worrying signs that little has changed to prevent it happening again.

‘If we don’t make some quite serious structural changes and change the incentives that producer this destructive behaviour, we are just setting the conditions for a repeat crisis.’

Chillingly, there’s a dire prediction that the world hasn’t heeded the lesson of Iceland and that history is bound to repeat itself.

It airs at 8pm tonight on ABC1.