Iceland is a country of rugged beauty, volcanic mountains, countless waterfalls and, well, ice. Its inhabitants are even more exotic; 54 per cent of Icelanders, for example, believe in elves – or say it’s possible that they exist. Travelling through the desolate landscape, one can easily imagine how such beliefs emerge: Iceland is a country with fewer than 400,000 residents. To put that in perspective, almost double the number of people live in the 33 square kilometres of Macau than in the 100,000 square kilometres of Iceland.

Iceland might seem like a strange place to start a story about the largest global financial crisis since the Great Depression. But Iceland exemplifies both the worst and best of the crisis. The story begins several years before 2008, when Iceland’s bank managers saw an opportunity: they could attract the savings of Europeans, mostly residents of England and the Netherlands, by offering interest rates higher than those of the banks of those countries.