Iceland’s woes continue with Government seizure of Kaupthing

| October 9, 2008 | 0 Comments

Kaupthing, Iceland’s largest bank, is the latest to be hit by the financial market turmoil after it has been seized by the country’s Government.

The country’s Financial Supervisory Authority said the move was done to protect its domestic banking system. However, it added that all domestic deposits at the bank were fully guaranteed.

It was arranged by the Government yesterday for Dutch bank, ING Direct, to take over the £2.5 billion of deposits of 160,000 UK customers of Kaupthing’s online arm, Kaupthing Edge.

This week, the regulator took control of two other of the country’s biggest banks, Landsbanki on Tuesday and then yesterday, Glitnir, was placed into receivership after the Government abandoned its decision to purchase a majority stake in the bank.

Earlier this week, the financial woes of Iceland meant the Government reached out to Russia to negotiate a €4 billion loan to prevent a collapse of the country’s finance sector.

The country’s currency, the krona has plummeted recently against the euro.

Tags: Glitnir, , , , Krona, Landsbanki

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