Iceland's Secret

Jared Bibler was an American who worked at Landsbanki before the collapse and then joined the Icelandic Financial Supervisory Authority as an investigator, where he led inquiries into market manipulation by the failed banks. The book combines memoir with a first-hand account of what the investigations found.

The central finding Bibler describes is that Kaupthing, Landsbanki and Glitnir systematically bought their own shares through proprietary trading desks to support their prices, then parked those shares with shell companies financed by loans from the banks themselves. The effect was that the banks' reported capital was partly composed of their own stock, bought with their own money, and that the market prices used to value collateral across the Icelandic system were manufactured. He describes tracing these transactions through trading records, and he covers the resulting prosecutions, including the Al Thani case involving Kaupthing.

Bibler also writes about institutional obstruction: the small size of Icelandic society, the personal connections between regulators, bankers and politicians, and his own conflicts with the FSA leadership. He left Iceland and the account is angry. Readers should weigh that, and should note that this is one investigator's perspective rather than a comprehensive history. The technical description of the share-support mechanism is the book's most valuable content and matches what the Special Investigation Commission reported.