Those capital controls are slated to come off next year. And many experts fear a return to the wild swings of the past -- in inflation, lending rates and the currency itself. Iceland is the smallest country in the world still clinging to its own currency and monetary policy. The krona soared nearly 90 per cent between 2001 and 2007, only to crash 92 per cent after the financial crisis in 2008.
It’s hard to imagine Canada would object. Iceland wouldn’t have a say in Canadian monetary policy and the dollars coursing through its small economy ($12-billion in GDP versus Canada’s $1.8-trillion) would be a blip in the Bank of Canada’s management of the money supply.