Member of Iceland's Parliament and former economist at Iceland's Bifrost School of Business
BBA 1984 (Economics)
Member of Iceland's Parliament
When Iceland native Lilja Mósesdóttir (BBA84 in economics) returned to campus to deliver the Howard R. Bowen Lecture in the fall of 2010, it was the first time she had been back to her alma mater since graduation.
“I had forgotten how friendly this community is,” she said. “Iowans have this positive attitude and politeness to them, even more friendly than Icelanders.”
Mósesdóttir, currently a member of Iceland’s Parliament, is a former economist at Iceland’s Bifrost School of Business. During her lecture, “Iceberg Tips Over: What Are the Implications of the Icelandic Financial Crisis?”, she discussed the facts behind the country’s recent economic collapse.
In 2008, when the banks were so deep in international debt that they failed and the country’s economy collapsed, Mósesdóttir decided to play a role in putting the economy back together. She ran for and won election to the Althing, Iceland’s parliament, in 2009. Among the Left-Green Movement party member’s committee assignments is the Business and Banking Committee, of which she serves as chair, and which gives her a primary role in the historic rebuilding of the country’s economy.
Prior to the collapse, Mósesdóttir was a harsh critic of Iceland’s loose banking rules that allowed unfettered lending and high debt loads for banks. She had argued that the banks were deeply in debt to foreign lenders and would be vulnerable in a global economic slowdown. According to Mósesdóttir, that lack of regulation enabled the owners of the Icelandic banks to rob them from the inside through Ponzi-style schemes.
“After the three main banks collapsed, Iceland took out loans from the International Monetary Fund (IMF),” she says. “I was the only economist in Iceland who was against signing an agreement with the IMF,” she says, “because it’s not a temporary thing. They were to be here for two years, but that has been extended now, and this historically happens when they are brought in to help a country recover.”
In addition, she says, the IMF raised interest rates from 12% to 18%, which made the crisis even worse.
“You have to have low interest rates to stimulate investments when people are having difficulties making ends meet,” she says. “I warned the people of Iceland that if they accepted the IMF this would happen, and the day after I said it publicly on the national radio, they raised rates.”
Today, Iceland is struggling under mountains of debt, government austerity, and a depressed economy. In October, growing social unrest brought thousands of people to demonstrate outside Parliament to show how angry they are about the country’s current economic situation.
Mósesdóttir admits she has different ideas and solutions to the country’s current problems.
“Americans are open to new ideas, and while I was at The University of Iowa, I saw that innovation is encouraged. I know my years at Iowa put their mark on me,” she says.
The Howard R. Bowen Lecture Series was established in 1986 by the Tippie College to honor former UI president and renowned economist Howard R. Bowen. The series is designed to provide a platform for individuals who demonstrate the distinction, thoughtfulness, and originality of Howard Bowen to address important issues facing society. Mósesdóttir’s lecture is available on the Tippie web site at tippie.uiowa.edu/speakers.