Responsibility, institutions and administration. Lessons from Iceland’s banking crisis

Abstract

Since the financial crisis there has been a focus on responsibility or accountability in Icelandic society and people have asked if some individuals were responsible for the fall of the Icelandic banks. This article discusses individual responsibility and the role of institutions in relation to a case of the consultative group on financial stability and contingency planning established in 2006 as described in the Special Investigation Commission report. The first part of the article discusses the distinction between passive and active responsibility and the role of institutions in defining roles and responsibility. In the second part, I will offer a detailed discussion of the case of the consultative group on financial stability in relation to responsibility. In the third part the case will be analyzed from the criteria of active responsibility and well structured institutions. The conclusion is that the consultative group failed as a structure to meet its task and give their members opportunity to behave responsibly prior to the financial crisis.