Ex-Iceland central bank chief warned of looming crisis

Iceland’s former central bank chief had warned about the country’s oversized banks before they went bust in 2008, he said yesterday at the trial of a former prime minister for failing to prevent the crisis.

David Oddsson was speaking on the second day of witness hearings at the trial of Geir Haarde, the only political leader to face prosecution over the crisis that hit the world economy. He has denied the charges.

Iceland’s top three banks collapsed in late 2008 after years of debt-fuelled expansion. The country of 320,000 people was forced to borrow $10 billion from the IMF and other lenders.