“There is no reason why they should pay the money back. Ordinary people didn’t run up the debts; the Dutch and British governments were guilty of regulatory incompetence; the overseas savers were stupid and greedy; and meeting the debt might well bankrupt the country for a generation.
If they refuse, they will make a point that taxpayers in many other countries will sympathize with: We won’t always pick up the bill for losses made by bankers. “
Later on he puts the blame on depositors and others:
“Third, the depositors were just as much at fault as anyone. They put money into Icelandic banks, which paid higher rates of interests than almost all their competitors. And yet you need an IQ of only about 10 to know that higher rewards involve higher risks. It was a stupid decision to deposit their money in those banks, and there is no reason to protect them from the consequences of their poor judgment.
Also, let’s bear in mind that the depositors were probably a lot wealthier than the ordinary Icelanders who will end up paying the bill. Why should prudent poor people pick up the tab for greedy rich ones?“
His article can be seen here.