Iceland: Ex-PM Geir Haarde party responsible for 2008 crisis, court says

Iceland's former Prime Minister Geir Haarde has been found guilty of one charge relating to the collapse of the country's banks in 2008, but will not be punished.

AFP reports that the ruling was handed down by the "never-before-used special court" Landsdomur in the capital Reykjavik.

Haarde was cleared of three counts of negligence but found guilty of failing to formally inform his ministers about difficulties with the country's banks ahead of the crisis, according to the BBC.  The charges carries no prison term or fine and his legal expenses will be paid for.

Reacting to the verdict, the International Business Times says that Haarde told reporters: "It is absurd."

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"It is obvious that the majority of the judges have found themselves pressed to come up with a guilty verdict on one point, however minor, to save the neck of the parliamentarians who instigated this," he is quoted as saying.

Haarde, who came to power when Iceland was one of the richest countries in the world, is the first politician in the world to face a criminal trial in connection with the global financial crisis, the Telegraph says.

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CNN explains that he was prime minister when the country’s banking sector swelled to ten times the size of gross domestic product.  He was ousted from power in Oct. 2008 when three of the biggest banks collapsed within a week, wiping out billions of dollars in savings and leaving Iceland grappling with a deep recession.

The Financial Times reports that most of the 50 senior figures in Iceland who testified during the trial argued that no one person could be blamed for the collapse of the banking sector.

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