Mr Haarde, who apologised for the banking collapse in 2009, was the first political leader to lose power as a direct consequence of the economic crisis.
He told Icelandic broadcaster IFS that parliament’s decision today was “difficult and hard to bear”.
The vote to press charges against Mr Haarde was close: 33 members voted to proceed, and 30 voted against.
His premiership oversaw the aggressive expansion of Iceland’s main banks – Kaupthing, Glitnir and Landsbanki – and the incredible growth in its economy. At one point the banks’ combined assets were 10 times greater than Iceland’s gross domestic product.