Iceland nationalises Kaupthing Bank

Iceland’s Financial Services Authority has nationalised the Kaupthing Bank as a response to the financial crisis which may result in a total collapse of the nation’s economy. Kaupthing, together with Glitnir Bank and Landsbanki, owe a total of US$61 billion, which is twelve times the estimated size of the economy of the Nordic country. The Financial Services Authority says Iceland will guarantee all domestic deposits and aims to provide a “functioning domestic banking system” by management of the banks. Iceland has asked for aid to Russia and the International Monetary Fund for loans to help guarantee these deposits. Icelandic equity markets have been closed until October 13 due to “unusual market conditions” and the Icelandic krona now appears to have itself failed after the collapse of an attempt to fix the exchange rate at... [read full story]