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?'

What does that tell us about government priorities?

Nothing good, I'm afraid.

I used to gloat about the way their pyramid scams collapsed just as every Friedmaniac in Denmark was orgiastically praising Iceland for being forward-looking and "reform" friendly. But runs on food stores kinda puts a dent in my schadenfreüde.

(Funnily enough, Iceland pretty much disappeared from the Danish press when they went belly-up - the boom was newsworthy, but apparently the bust wasn't.)

- Jake

Ceterum censeo Chicago esse delendam

Best commentary on the web.. here in ET.. period.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

Exista; Kaupthing; Glittnir; Straumur; Landsbanki and Spron.

It appears that this is because Kaupthing are going to be the next fermented Bank.

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%