Iceland stays its hand with banks for now

Published: Oct. 6, 2008 at 12:16 PM

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.

© 2008 United Press International, Inc. All Rights Reserved.
Order reprints



Additional News Stories
Hialeah reopens for racing (15 min)
COL BKB: Wisconsin 78, Maryland 69
'Jetman' flight ends up in Mediterranean
Report: Iverson announces NBA retirement
Obama's use of 'unprecedented' chided
Soderling first through to ATP semifinals
UPI NewsTrack Health and Science News
fark
Atheist group asks to put up sign honoring war veterans near Christmas display. Pennsylvania town...
Scientists have now created a baby bottle that heats itself up in 60 seconds. A perfect gift for...
Photoshop this guy in reflective shades
Suing Activision over World of Warcraft? Don't forget to subpoena Depeche Mode and Winona Rider,...
Hannity: This is one of the coldest years on record, so global warming is a hoax. Science: This...
Spotted cow removed from Mad River in NY. The image in your mind's eye is wrong