Smith Experience Abroad:
Doing Business in the UK and Iceland:
The Financial Meltdown
Spring one-credit BUSI788Q and Summer 1 term two-credit
This class will examine how Iceland negotiated its 2008 financial meltdown,
and look at the current relationship between the London creditors and the
Icelandic government and population. The class will undertake a comparison
between Iceland’s and Ireland’s approaches to similar crises.
Iceland disregarded international norms by refusing to pay back debt -- and
enjoyed a pretty impressive recovery. Ireland negotiated with its fellow EU
citizens and did not recover as well. However, Iceland’s refusal -- more than
93% of Icelanders voted to reject a deal to repay the U.K. and the Netherlands
€3.9 billion ($5.3 billion) – disrupts its relationship with those creditor
Iceland was the little country that could. An island of just 300,000 people,
best known for its volcanic hot springs and fish, it became a financial
powerhouse at the turn of the century. The corporate sector went on an
acquisition spree, and the housing market boomed with cheap loans. Everyone
seemed to be doing well as housing prices doubled, the strong krona encouraged
Icelanders to shop in London, and Icelandic billionaires bought British
retailers and football clubs.
In late 2008, all the island's major banks failed, including Landsbanki hf.
Iceland's tiny deposit-insurance scheme couldn't pay the claims of British and
Dutch, and the two governments stepped in to pay on Iceland’s behalf -- quickly
asking for repayment. The payment of €3.9 billion was staggering, equivalent to
nearly half of Iceland's entire economic output, and the government refused.
With the economy projected to grow 3 percent this year, Iceland’s decision to
protect its population from shouldering the debt is looking smart -- and may
prove to be a model for others..
Projected Cost: Each program has the following cost components:
$3,000 Program Fee: Includes shared hotel room; local transportation to
business meetings, and required cultural activities; tickets or fees for
required activities; some group meals; and professor and partner fees.
$4,275 Tuition Costs (3 credits): Each program is divided into a mandatory
1-credit (BUSI788) pre-departure course requiring 12 hours of pre-departure
course work (usually held over 2 weekend-days) and a 2-credit 10-12 day study
abroad immersion course(BUSI 798).
$250 Education Abroad Fee which goes directly to the campus office to
maintain the emergency plan.
Personal expenses, international airfare, tourist visa application (if
required), some meals and some inter-country transportation (if part of the
program) should be added to calculate the total Projected Cost.
The schedule for adding and/or dropping this course adheres to UM’s schedule.
For details, go to:
There will be a $500 penalty if the course is dropped after February 10,
DO NOT PURCHASE AIRFARE UNTIL COURSE IS CONFIRMED. Students are advised UM
Education Abroad to purchase refundable airline tickets.