His tale is similar to thousands of others. He had needed a new car and went to his bank for a loan – Icelanders, for so long a frugal people dependent on fish and agriculture, have become as addicted to debt as the British. His lender suggested using a "currency basket", made up of different strong currencies, to buy a secondhand Cadillac from America because the krona was weak. The little currency had suffered from volatility in the past but no one predicted what came next. In October, the banking system imploded under the weight of an enormous mountain of debt. The three big banks had boasted assets many times the size of the country's GDP, but their liabilities were of a similar order. When the government nationalised the banks, it was left with liabilities in excess of $60 billion (£40 billion), more than three times GDP. The krona nose-dived and borrowers like the taxi driver woke up one cloudy morning to discover that, in krona terms, their loans had doubled in size. With the krona effectively dead, the country has been forced to seek the shelter of a bigger currency – probably the euro.