Time appeared to be running out for Iceland to deliver a solution to the financial crisis as the currency slumped 30% against the euro
...In an address broadcast on Icelandic television, prime minister Geir Haarde said the bill, supported by opposition parties, would allow the government to push through mergers between the battered Icelandic banks or force them to declare bankruptcy.
..."As recently as last night, it looked like the banks could continue operations for a while," he said. "This morning and today, things have totally changed for the worse."
...The emergency bill, which parliament was due to adopt last night, would also allow the government to take over housing loans held by the banks and put them in a government housing fund.
...The government also followed the likes of Ireland and Germany by guaranteeing all of the domestic deposits in Icelandic savings accounts, although UK savers in the popular Icesave and Kaupthing Edge accounts run by the Icelandic banks will not be covered.
...Haarde warning Icelanders at the time of "the inevitable cut in living standards" to come.
...for many thousands of individuals in Iceland who were encouraged to take out car loans and mortgages in foreign currencies in recent years.
...In Iceland, there was widespread fear.
...everyone in the country was "holding their breath". She today withdrew her cash from the bank, all the way to her overdraft limit, to make sure her family had enough to live on.
...We've all been living ahead of ourselves, so in many ways this was inevitable. People here have been so obssessed with money. Iceland is like a nouveau riche country. same here in Australia(vbo).
...We trusted the banks and they encouraged us to borrow money."same here in AU(vbo)
...Iceland has undergone a remarkable transformation in the past couple of decades, from an economy largely based on fishing to one of the richest in Europe, driven by its biggest three banks following deregulation of the banking system. The banks grew rapidly on borrowing and now have assets eight times Iceland's GDP. But the party has come to an end, with the krona losing more than half its value against the euro in the past 12 months, inflation running at 12%, and interest rates at 15.5%