Iceland's banks, which rely on money markets for funding, have been among the hardest-hit in Europe as investors shun all but the safest assets. The country's government is investing 600 million euros ($859 million) in Glitnir in return for a 75 percent stake.

'Customers would come in and we would apply for credit online for them, a 100 per cent loan, and they can drive away in their new Range Rover. It took ten minutes, it was very easy. But 60 to 70 per cent of those loans were in foreign currency, Japanese yen or Swiss francs, and they have gone up 90 per cent as the krona burns. A car worth 5 million krona now has a 9 million loan on it; how are people going to make those payments?'