Iceland Seeks Emergency Loan From Russia


The government of Iceland took extraordinary measures on Tuesday to stave off “national bankruptcy,” as the credit crisis tightened its grip on this remote island nation in the North Atlantic.
In an effort to avoid financial collapse, the government took control on Tuesday of the country’s second-largest bank — its second takeover in two weeks. And, in a measure more characteristic of troubled developing economies than one of the wealthiest in the world, Iceland’s central bank pegged the currency to a basket of others.

Most surprising, the government announced that it had asked Russia for a loan of 4 billion euros, about $5.5 billion, to try to keep the economy afloat.
As I have heard Russia agrees.
Savings bank ING Direct is buying up more than £3bn of deposits held by tens of thousands of British savers.

It says it is acquiring £2.5bn of deposits held by 160,000 customers from Kaupthing Edge, the UK retail arm of Iceland's biggest bank.

It is also taking control of £538m of savings held by 22,200 people with Heritable Bank, which was run by Iceland's Landsbanki - Icesave's owner.

This is similar to Santander's control of Bradford & Bingley savers' deposits.

ING Direct is a subsidy of Netherlands-based ING Group.
The interesting point is, what will Russia get in return? The comment in the Spectator yesterday was that they would ask for (at least) refueling and other admin rights on the old US base at Keflavik.

Apparently the US irritated the Icelanders by pulling out so quickly (decision March 06, all gone by September 06), leaving the local economy looking for another source of income. They might have found it.

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