Wednesday, October 8, 2008

Icelandic Prime Minister Geir Haarde warns nation of bankruptcy

A man walks out of a branch of Landsbanki in Reykjavik, Iceland Tuesday Oct. 7, 2008 . Iceland nationalized its second-largest bank Landsbanki on Tuesday under day-old legislation and negotiated a euro4 billion (US$5.4 billion) loan from Russia to shore up the nation's finances amid a full-blown financial crisis. The moves came a day after trading in shares of major banks was suspended, the Icelandic krona lost a quarter of its value against the euro, and the government rushed through emergency legislation giving it new powers to deal with the financial meltdown. Prime Minister Haarde warned late Monday that the heavy exposure of the tiny country's banking sector to the global financial turmoil raised the spectre of 'national bankruptcy.

This volcanic island near the Arctic Circle is on the brink of becoming the first "national bankruptcy" of the global financial meltdown. "Everything is closed. We couldn't sell our stock or take money from the bank," said Johann Sigurdsson as he left a branch of Landsbanki in downtown Reykjavik.

No comments: