Is Switzerland to suffer the fate of Iceland because of bank liabilities?
The problem for the Iceland banks was, as the other posters mentioned, too much leverage. Specifically it was having too much short-term debt that could be taken away quickly but could not be easily replaced. Relative to their debts, Icelandic banks were funded by a small domestic deposit base (from a population of roughly 300,000) and limited foreign retail banking operations (which were not yet large enough to make a difference). Compared to Iceland, Switzerland is on much safer ground. First of all, the domestic deposit base is much bigger (population of just over 7m, and with real industries that actually export profitably). The long history of Swiss wealth management also mean huge amounts of foreign capital under Swiss administration – and this is money that will not be moved easily (and there are only a few alternatives that offer the same combination of banking secrecy and sound legal protection). More likely candidates for your poll are Ireland, where the government’s blanket
