This article explores how the financial crisis in 2008 could have been partially avoided by Iceland through observing the warning signs. Iceland experienced the harshest consequences from the financial crisis in the Western world, such as the total collapse of its banking sector. This article compares the prelude of Iceland's financial crisis to the Scandinavian one, less than 20 years ago, providing an understanding of the sources of the crisis and its impact. Results show that signs of overexpansion in Iceland were clear and numerous. Iceland's structural weaknesses resemble many other badly hit countries, simply more extreme. © 2011 Wiley Periodicals, Inc.

Icelandic culture has generally been considered to share many similarities to the Nordic cultures. However, the financial crisis in 2008 painted a completely different picture, with the Nordic nations faring much less worse than Iceland, which saw its banking system becoming almost entirely worthless. Looking at traditional cultural yardsticks in the vein of the most commonly used research in the field of business and organizational management, generally linked to Hofstede´s dimensional studies, one would at first glance conclude that Icelanders would have behaved in a similar manner as people in the Nordic nations. By focusing on savings ratio, it is shown that Icelanders were much more risk-seeking during the prelude of the crisis. Many nations badly hit during the 2008 financial crisis have a high level of individualism inherent in their culture. Iceland fits this scenario. Thus while general cultural characteristics may lack explanatory power regarding economic behavior of people between cultures, the individual/collective cultural dimension may provide clues of what dangers (and possible strengths) lurk within societies from a financial point of view. Such developments may affect the financial stability of nations, especially those with a high level of individualism where financial liberalization with possible abuses is occurring.

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The late twentieth century is widely heralded as the time that proved the inadequacies of communism and socialism and the triumph of the free market. Free trade interlinking an increasingly globalized economy would make war among nations unthinkable. Resources that previously supported governments were freed for private use. The liberated and self-regulating market would insure efficiencies unknown to centralized planners, remove the need for most regulations, and usher in an age of unknown plenty and prosperity for all. The foundation of the successful free market would be the unfettered individual. This ideology, known as "neoliberalism," would have tragic consequences for millions as its proponents such as the Chicago School economists and their political allies implemented its tenets around the world (Klein 2007; Mirowski 2014). Iceland was not immune. Icelandic economists, ideologues, and politicians enacted their own version of neoliberalism centered on the instantaneous creation of wealth through the privatization of the resources of the sea-fish (Bergmann 2014). As it had done around the world, neoliberalism eventually concentrated wealth in

Abstract. The novelty of this article is the comparative analysis of the Romanian and (1999( -20061998. Before privatization, banks in both countries lacked experience in a new banking "arena". The global financial crisis greatly affected the two banking systems. Despite similarities, the evolution of the two banking systems was also marked by differences, notably the ownership origin of banks after privatization (foreign dominance in Romania; domestic owners in Iceland) and different business models developed by banks in the pre-crisis period.