was greatly reduced and the net wealth tax abolished. "Nordic Tiger" was a term used to refer to the period of economic prosperity in Iceland that began in the post-Cold-War 1990s. The welfare state The social expenditure as a percentage of GDP in Iceland lagged considerably behind the social expenditures in the other Nordic states during the 20th century. There are two primary reasons in the academic literature for why Iceland lagged behind: "The absence of a strong social democratic party" - Whereas labor unions were fairly strong in Iceland, votes on the left were split between several leftist parties, which meant that the leftist tendencies did not translate into political power. "A stronger emphasis on individualism and self-help" 21st century Icelandic financial crisis The "Nordic Tiger" period ended in a national financial crisis in 2008, when the country's major banks failed and were taken over by the government. Iceland went from the fourth richest country in the world (GDP per capita) in 2007 to the 21st place in 2010. According to a 2011 study, Iceland privatized its banks in the early 2000s and the rapid expansion of the banking system, coupled with Iceland's small size, meant that the central bank was incapable of serving as the lender of last resort if a crisis were to occur. The banks made risky loans and manipulated markets. Iceland's regulators and public institutions were weak and understaffed, and were thus not properly regulating or supervising the banks. Political connections between senior bank managers, key shareholders and elite politicians meant that there was insufficient will to properly regulate the banks. Following sharp inflation in the Icelandic króna during 2008, the three major banks in Iceland, Glitnir, Landsbanki and Kaupthing were placed under government control. A subsidiary of Landsbanki, Icesave, which operated in the UK and the Netherlands, was declared insolvent, putting the savings of thousands of UK and Dutch customers at risk. It also transpired that over 70 local authorities in the UK held more than £550 million of cash in Icelandic banks. In response to statements that the accounts of UK depositors would not be guaranteed, the British governments seized assets of the banks and of the Icelandic government. On 28 October 2008, Iceland's central bank raised its interest rate to 18 per cent to fight inflation. The Ice-save dispute, coupled with belated IMF assistance and no direct economic assistance from Iceland's close