The Icelandic "outvasion" ( Icelandic: ''útrás'' ) was the period in the economic history of Iceland between 2000 and the onset of its

financial crisis A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value. In the 19th and early 20th centuries, many financial crises were associated with Bank run#Systemic banki ...

in October 2008. With the privatisation of the

Icelandic banks The following is a list of banks in Iceland. Contemporary banks Central * Central Bank of Iceland Commercial * Arion Bank (formerly known as ''New Kaupthing'') * Íslandsbanki (formerly known as ''New Glitnir'') * Landsbankinn (formerl ...

being advantageous for investors, there was a large supply of cheap loan capital on the international market. A clause in the agreement with the

European Economic Area The European Economic Area (EEA) was established via the ''Agreement on the European Economic Area'', an international agreement which enables the extension of the European Union's single market to member states of the European Free Trade Asso ...

stipulated the free flow of

capital Capital and its variations may refer to: Common uses * Capital city, a municipality of primary status ** Capital region, a metropolitan region containing the capital ** List of national capitals * Capital letter, an upper-case letter Econom ...

to and from

Iceland Iceland is a Nordic countries, Nordic island country between the Atlantic Ocean, North Atlantic and Arctic Oceans, on the Mid-Atlantic Ridge between North America and Europe. It is culturally and politically linked with Europe and is the regi ...

. The so-called outvasion entailed Icelandic financiers (sometimes styled '' útrásarvíkingar'', 'outvasion Vikings') to purchase many foreign businesses, particularly in the retail sector. The British retailers

Debenhams Debenhams plc was a British department store chain that operated in the United Kingdom, Ireland and Denmark, as well as franchised locations across Europe and the Asia Pacific. The company was founded in 1778 as a single store in London and gr ...

, Woolworths, Hamleys, and others came into full or part-Icelandic possession, in addition to the Danish companies

Magasin du Nord Magasin is a Denmark, Danish chain of department stores. It has seven department stores with its flagship store located on Kongens Nytorv in Copenhagen. The company is a subsidiary of the German department store retailer Peek & Cloppenburg, Peek & ...

and

Royal Unibrew Royal Unibrew is a brewing and beverage company headquartered in Faxe, Denmark. Its brands include Ceres brewery, Ceres, Faxe Brewery, Faxe, Albani Brewery, Albani, Thor Brewery, Thor, Karlens Brewery, Karlens and Royal. Royal Unibrew also has a s ...

Novator Partners Novator Partners LLP is a British private equity investment firm based in London owned by Björgólfur Thor Björgólfsson. Assets overview The company specializes in investments in companies based in emerging markets. Industries by which it fo ...

acquired telecoms and other assets around Europe, including České Radiokomunikace,

Elisa The enzyme-linked immunosorbent assay (ELISA) (, ) is a commonly used analytical biochemistry assay, first described by Eva Engvall and Peter Perlmann in 1971. The assay is a solid-phase type of enzyme immunoassay (EIA) to detect the presence of ...

, Saunalahti, Bulgarian Telecommunications Company, P4 Spółka z o.o., Netia, and Forthnet.

Terminology

The English term ''outvasion'' was coined by the Icelandic media as a

calque In linguistics, a calque () or loan translation is a word or phrase borrowed from another language by literal word-for-word or root-for-root translation. When used as a verb, "to calque" means to borrow a word or phrase from another language ...

on the Icelandic term ''útrás''. ''Út'' means 'out'; ''rás'', in this context, means 'a rush, race, sprint, expansion'; and ''útrás'' correspondingly means ''outward rush''. It was used to describe the Icelandic bankers as brave Vikings raiding the world via acquiring businesses.

Investigations

In 2005 a group of Danish journalists found that Thor Björgólfsson, his father Björgólfur Guðmundsson and friend

Magnús Þorsteinsson Magnús Þorsteinsson is a businessman and was chairman of now defunct Avion Group. He was a high-profile investor and entrepreneur with interests in aviation and financial services. Beverage businessman in Saint Petersburg Magnús began his inv ...

all have background in Russia, where they ran beverage businesses in the 1990s before moving to Iceland. They provided details about their activities in Russia. Icelandic links to Russia were also highlighted by ''The Guardian'' newspaper article "Next-generation Viking invasion - They've got the cash to buy big UK groups like M&S. But where does it come from?" in 2005. Furthermore, investigations have identified six British Virgin Islands-based shareholders behind Icelandic banks and companies such as Glitnir,

Landsbanki Landsbanki (, ), also commonly known as Landsbankinn (, ) was one of the largest Icelandic commercial banks; it failed as part of the 2008–2011 Icelandic financial crisis when its subsidiary sparked the Icesave dispute. On October 7, 2008, t ...

(and its Internet brand Icesave),

Kaupthing Kaupthing Bank (, ) was a major international Icelandic bank, headquartered in Reykjavík, Iceland. It was taken over by the Icelandic government during the 2008–2011 Icelandic financial crisis and the domestic Icelandic-based operations were ...

, Baugur Group and Exista: Starbook International Limited, Waverton Group Limited, Birefield Holdings Limited, Shapburg Limited, Quenon Investments Limited, and Liftwood Investments Limited. All six are registered in P.O. Box 3186 Road Town, Tortola, British Virgin Islands. Documents available on Luxembourg authorities' website and discovered by Danish journalists show that Shapburg Limited and Quenon Investment Limited owned a stake in Luxembourg-based Alrosa Finance, a subsidiary of Russian state-owned diamond company

ALROSA Alrosa () is a Russian group of diamond mining companies that specialize in exploration, mining, manufacture, and sale of diamonds. The company leads the world in diamond mining by volume. Mining takes place in Western Yakutia, the Arkhangels ...

. Shapburg Limited also owned a stake in Luxembourg-based Alfa Finance Holdings, a subsidiary of

Alfa-Bank Alfa-Bank JSC () is the largest of the private banks in Russia. It was founded in 1990 by Russian businessman Mikhail Fridman, who remains the controlling owner. Headquartered in Moscow, it operates in seven countries, providing financial servi ...

of Russia.

Outcomes

The Icelandic outvasion period ended in October 2008 with the downfall and default of the three leading Icelandic banks,

and Glitnir, totalling $85bn of debt, that led directly to the collapse of the national currency, the government and much of the economy. In September 2010,

Geir Haarde Geir Hilmar Haarde (; born 8 April 1951) is an Icelandic politician who served as prime minister of Iceland from 15 June 2006 to 1 February 2009, and as president of the Nordic Council in 1995. Geir was chairman of the Icelandic Independence Par ...

, the former prime minister, became the first Icelandic minister to be indicted for misconduct in office. He was convicted for not holding cabinet meetings when things turned critical, but has been found not guilty of negligence over the 2008 financial crisis. On December 12, 2013, Hreiðar Már Sigurðsson, former CEO of Kaupthing Bank, was sentenced to five and a half years in prison for his part in a

market manipulation In economics and finance, market manipulation occurs when someone intentionally alters the supply or demand of a security to influence its price. This can involve spreading misleading information, executing misleading trades, or manipulating ...

case involving Sheikh Mohammed Bin Khalifa Bin Hamad al-Thani's purchase of a 5.1% share in

Kaupthing Bank Kaupthing Bank (, ) was a major international Icelandic bank, headquartered in Reykjavík, Iceland. It was taken over by the Icelandic government during the 2008–2011 Icelandic financial crisis and the domestic Icelandic-based operations were ...

weeks before the bank collapsed in October 2008. This was, at the time, the heaviest sentence for financial fraud in Iceland's history. Three other executives were also sentenced to jail. The verdict was appealed later, but the Supreme court upheld the previous verdict on February 12, 2015. Thor Björgólfsson, the former owner of

, lost most of his wealth, but personally owned up to his debt and managed to settle up with creditors. By the autumn of 2014, he regained his previous status, primarily because of the

Actavis Actavis Generics (formerly known as Watson Pharmaceuticals and Actavis plc, prior to the acquisition of Irish-based Allergan, Inc.) is a global pharmaceutical company focused on acquiring, developing, manufacturing and marketing branded pharmaceut ...

acquisition by Watson Pharmaceuticals.

References

{{DEFAULTSORT:Icelandic Outvasion Economy of Iceland Great Recession in Europe Russian Mafia events