STOCKHOLM: The Icelandic central bank struck a deal with the central banks of Sweden, Norway and Denmark on Friday that allows it to buy euros with Icelandic kronur, giving strong support to the island's beleaguered currency. Each swap arrangement is for as much as €500 million, or $774 million, but analysts said it was not the amount that mattered but the deal itself, which underlined how the Icelandic central bank, the Sedlabanki, was actively working on ways to support the currency. The Sedlabanki termed the move a "precautionary measure" while the head of the Swedish Riksbank said central banks had a responsibility to cooperate in times of uncertainty. "This of course is bound to be positive news," said Jon Bentsson, economist at Glitnir in Reykjavik.
STOCKHOLM: The Icelandic central bank struck a deal with the central banks of Sweden, Norway and Denmark on Friday that allows it to buy euros with Icelandic kronur, giving strong support to the island's beleaguered currency.
Each swap arrangement is for as much as €500 million, or $774 million, but analysts said it was not the amount that mattered but the deal itself, which underlined how the Icelandic central bank, the Sedlabanki, was actively working on ways to support the currency.
The Sedlabanki termed the move a "precautionary measure" while the head of the Swedish Riksbank said central banks had a responsibility to cooperate in times of uncertainty.
"This of course is bound to be positive news," said Jon Bentsson, economist at Glitnir in Reykjavik.
It's a disaster waiting to happen, as its Nordic cousins well know.... "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
"A man can steal more money with a briefcase than a man can steal with a gun," as Don Henley informed us. The magnitude increases exponentially if the "man" runs a national bank. Is there any bound on this increase? Perhaps the world money supply? As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
