Professor Elam

Iceland banks offered high interest rates attracting lots of deposits from Britain and Europe. Those banks then made loans on high risk projects. Now the loans are not paying and depositor money is at risk. This is a microcosm of what is happening around the world. Now Russia is considering bailing out Iceland. Why?

It is a smart strategic move on Putin's part.  He needs to look like a caring capitalist, here is the chance to try that in a small country. And a strategic one if you have read many Tom Clancy novels.  Russia would dearly love to become a world financial center, how better to do that than by buying a country?  As Putin watches the US scrambling to stay afloat, he is seeing lots of opportunities, after all Russia has or should have banked a lot of money as oil prices increased, and will probably increase again.