Iceland stays its hand with banks for now

REYKJAVIK, Iceland, Oct. 6 (UPI) -- Bankers and Icelandic officials worked through the weekend to find a solution to the country's ailing financial system, the government said.

Icelandic Prime Minister Geir Haarde said Monday that no special steps would be undertaken at this time, The Times of London reported.

But, tensions mounted after the government nationalized Glitnir, one of Iceland's largest lenders, last week.

The risks are steep. Icelandic banks' $100 billion in foreign investments are far larger than the country's gross domestic product of $14 billion, The Times reported.

Iceland's Pension Fund Association offered to shore up domestic liquidity by transferring $17 billion in foreign assets to domestic accounts.

Chief Executive Officer of Kaupthing bank Hreidar Mar Sigurdsson said discussions with the government included Icelandic banks making the same move, selling foreign assets to prop up domestic liquidity.

Sigurdsson said the Kaupthing bank was in no need of government intervention, The Times reported.