An article in the FT on 25 March 2008 stated: ‘The transformation has seen Iceland’s GDP per capita rise to about $40,000 (€25,600, £19,900) – the sixth highest in the OECD, the club of the world’s...

‘The transformation has seen Iceland’s GDP per capita rise to about $40,000 (€25,600, £19,900) – the sixth highest in the OECD, the club of the world’s rich nations. But this transformation has come at a cost. Rapid growth has created imbalances in Iceland’s economy and the global credit crisis has exacerbated fears that the rapid expansion of the economy and the banking system may be a house of cards poised to topple.’

You are required to comment on this viewpoint. In particular, discuss whether the ambitious policies of the banking sector had been beneficial to the long-term economic health of Iceland’s economy.