 International economic relations increased further after 2001, when Iceland's newly deregulated banks began to raise massive amounts of external debt, contributing to a 32% increase in Iceland's gross national income between 2002 and 2007.In 2003–2007, following the privatisation of the banking sector under the government of Davíð Oddsson, Iceland moved toward having an economy based on international investment banking and financial services.It was quickly becoming one of the most prosperous countries in the world but was hit hard by a major financial crisis.