Frétt CNN um íslenska fjármálakreppu

REYKJAVIK, Iceland (AP) -- Iceland halted trading in the shares of six of its major banks and put 100 percent guarantees on savers' deposits Monday as the world financial crisis engulfed the tiny island nation.

Iceland is under severe pressure to draw up a plan to cope with economic turmoil.

Business Affairs Minister Bjorgvin G. Sigurdsson went on state radio to say that a draft of the rescue plan was "well on it's way" following crisis talks among lawmakers, financial regulators, bank executives and union leaders over the weekend.

The Icelandic prime minister's office assured customers that their deposits in the country's commercial and savings banks would be "fully covered," following in the footsteps of Ireland, Germany, Austria, Greece and Denmark, who have made similar moves to guarantee bank deposits.

Iceland is particularly exposed to the global credit squeeze because of the massive size of its banking sector, which has benefited from an economic boom in recent years, growing to dwarf the rest of the economy with assets at nine times the annual gross domestic product of €14 billion ($19 billion).

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Investors are now punishing the whole country for the banking sector's heavy exposure -- its currency has gone through the floor, imports have fallen and inflation is soaring.

The government last week nationalized the country's third largest bank, Glitnir, after it suffered funding issues.

A collapse of the Icelandic financial system could also have ramifications across Europe given the heavy investment by Icelandic banks and companies across the continent.

One of the country's biggest companies, retailing investment group Baugur, now owns or has stakes in dozens of major European retailers -- including enough to make it the largest private company in Britain, where it owns a handful of well-known stores such as the famous toy store Hamley's.

Kaupthing, Iceland's largest bank and one of those whose share trading was suspended on Monday, has also invested in European retail groups and has other clients including entrepreneur Robert Tchenguiz and property investors the Candy brothers.

Iceland's financial links with Britain are particularly strong, with around 150,000 British savers depositing money with the retail arms of Kaupthing and the second largest bank, Landsbanki.

As speculation grows about the viability of many of Iceland's financial institutions, the Icelandic Financial Supervisory Authority temporarily suspended trading in financial instruments issued by Kaupthing, Landsbanki, Glitnir, Straumur-Burdaras, Exista and Spron.

The regulator initially said that it made the decision "to safeguard the equality of investors while awaiting an announcement," but in an updated announcement to the exchange removed any reference to an expected announcement.

"Uncertainties regarding the issuers are likely to disrupt normal price formation, and as such, any trading could be detrimental for investors," it said in the second statement. "Furthermore, this decision has been made to ensure equal treatment of investors, as the issuers cannot ensure confidentiality of price-sensitive information which has not been made public."

Part of problem is that Iceland's tiny size has led to a high level of cross ownership of assets between banks and companies, which creates a house of cards scenario.

In that eventuality, the central bank with its liquid foreign assets of just €4 billion ($5.5 billion) will be pushed to make any more bailouts -- the big four banks have combined foreign liabilities in excess of €100 billion ($137 billion).

Those concerns led all the major credit ratings agencies to downgrade Iceland's sovereign, or government, credit rating last week.

Before trade in their stocks was halted on the OMX Nordic Exchange Iceland, Spron plummeted 17.4 percent, while Straumur dropped 1.3 percent, Glitnir lost 2.7 percent and Kaupthing shed 0.9 percent. The other two stocks were trading higher, with Landsbanki up 4.2 percent and Exista up 0.2 percent.

The exchange's chief executive Thordur Fridjonsson had said earlier on Monday that closing the entire bourse would "not be the right reaction" to the crisis.

 

Athugasemdir

[Hjördís Edda (IP-tala skráð) 6.10.2008 kl. 19:07]

Hvernig var þetta í Thule auglýsingunni? "Ísland bezt í heimi" eða hvað?

Kannski að allir ættu að fá sér einn Thule og allt batnar

[Ragnheiður , 6.10.2008 kl. 19:09]

Jaá...látum Haarde koma með Thule á línuna fyrir íslenska þjóð

[Hrönn Sigurðardóttir, 6.10.2008 kl. 20:11]

....er ekki betra að "haarda" ´etta bara? as in ekki gera neitt.....