Free Republic

Iceland is set to receive a $6-billion (U.S.) IMF-led rescue package soon, Britain's Financial Times reported on Monday, as the crisis that has derailed the country's banking system showed no sign of letting up. Iceland's central bank reported nagging problems with payments from abroad to its banks and said it had called on some other central banks to help it fix the situation. The crisis-hit island, aiming to resuscitate trade in its currency and rebuild its financial system, has been in talks with the International Monetary Fund for days and markets have been waiting for word of a rescue package...

People go bankrupt all the time. Companies do, too. But countries? Iceland was on the verge of doing exactly that on Thursday as the government shut down the stock market and seized control of its last major independent bank. That brought trading in the country's currency to a halt, with foreign banks no longer willing to take Icelandic krona, even at fire-sale rates. As the meltdown in the Icelandic financial system quickened, with the government seemingly powerless to do anything about it, analysts said there was probably only one realistic option left: for Iceland to be bailed out by the...

Russia has granted Iceland a EUR 4 billion (USD 6 billion) loan, as Russia’s Ambassador to Iceland Victor I. Tatarintsev announced to Davíd Oddsson, chairman of Iceland’s Central Bank’s board of directors, this morning. The loan will be to three or four years and the interest rates between 30 and 50 points above Libor rates, ruv.is reports. The decision has been confirmed by Russia’s Prime Minister Vladimir Putin. According to ruv.is, Iceland’s Prime Minister Geir H. Haarde has been investigating the possibility of such a loan from Russia since mid-summer. Experts from the Central Bank of Iceland and Iceland’s Prime...