Hildur Helga Sigurðardóttir in Reykjavik, Helen Power and Peter Stiff The Icelandic Government seized control of the country’s biggest banks last night in an attempt to fend off wholesale economic collapse. Turmoil at the banks, whose shares were suspended by the Government yesterday afternoon, had sparked panic in the tiny state, which has a population roughly the size of Coventry. Queues formed at petrol stations as Icelanders rushed to fill up before reported fuel shortages, while savers who tried to withdraw money from banks or sell bank shares on the internet found websites were not working. Meanwhile, fears mounted in Britain that the deterioration of Iceland’s two biggest banks — Kaupthing and Landsbanki, whose financial reach stretches farther than their 300,000-strong home nation — could have disastrous consequences...
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