'What we have learned from this whole exercise over the last few years is that it is not wise for a small country to try to take a leading role in international banking,' he said in a joint interview with news agencies late on Wednesday.
*******************************
Iceland takes control of biggest bank
* Iceland takes control of biggest bank Kaupthing
* Kaupthing board quits
* Prime Minister says IMF help an option
REYKJAVIK - Iceland took control on Thursday of its biggest bank, Kaupthing, to try to shore up a teetering banking system.
The state has now seized control of three of the nation's major banks after Landsbanki and Glitnir were taken over earlier this week.
At the centre of a financial hurricane which has claimed several of the world's biggest banks, Iceland's prime minister has warned of the risk of national bankruptcy.
The central bank has tried then abandoned attempts to prop up its battered currency.
Iceland's Financial Supervisory Authority (FME) said on its website that Kaupthing's domestic deposits were fully guaranteed and that all its domestic branches, call centres, cash machines and Internet operations would be open for business as usual.
'The Icelandic Financial Supervisory Authority has, under powers granted by the Icelandic Parliament, proceeded to take control of Kaupthing,' the authority said.
'The action taken by the FME is a necessary first step in achieving the objectives of the Icelandic Government and Parliament to ensure the continued orderly operation of domestic banking and the safety of domestic deposits.'
Iceland adopted sweeping powers late on Monday that gave the state the ability to dictate banking operations and allow it to push through mergers or even force a bank to declare bankruptcy.
The government swiftly used them to dismiss the board of directors of Landsbanki and put it into receivership.
Glitnir, and now Kaupthing, rapidly followed into the state's clutches.
Home to just 300,000 people in the North Atlantic, Iceland epitomised the global credit boom that turned to bust 15 months ago. Its banks expanded dramatically overseas, investors took large positions in its high-yielding currency and foreign money poured into local projects.
IMF OPTION
Prime Minister Geir Haarde said that Iceland was probably paying the price for punching above its weight.
'What we have learned from this whole exercise over the last few years is that it is not wise for a small country to try to take a leading role in international banking,' he said in a joint interview with news agencies late on Wednesday.
Iceland's banking assets amounted to about nine times its gross domestic product and its current account deficit has billowed to 16 per cent of GDP last year.
Mr Haarde said he had not asked for help from the International Monetary Fund, which has sent a delegation to Reykjavik. But he said assistance from the Fund was 'definitely an option' and separate negotiations to secure a 4 billion euro (US$5.45 billion) loan from Russia would begin next Tuesday.
KAUTPHING BOARD QUITS
Kaupthing said its board had resigned and that it had requested the authorities take control.
In a demonstration of how fast Iceland's crisis is moving, Kaupthing said that as late as Sept 26, directors believed the bank was performing well and that third quarter results would be good.
The final straw came when Britain transferred control of the business of Kaupthing Edge, its Internet bank, to ING Direct and put Kaupthing's UK operations into administration. That put Kaupthing in technical default according to loan agreements.
'It did not matter that the parent company had sufficient liquidity and its position was solid,' Kaupthing said in a statement.
As tension rose between the two countries, British Prime Minister Gordon Brown also threatened legal action on behalf of more than 50,000 savers with Landsbanki's icesave unit, which has frozen its accounts. -- REUTERS
*******************************
Iceland takes control of biggest bank
* Iceland takes control of biggest bank Kaupthing
* Kaupthing board quits
* Prime Minister says IMF help an option
REYKJAVIK - Iceland took control on Thursday of its biggest bank, Kaupthing, to try to shore up a teetering banking system.
The state has now seized control of three of the nation's major banks after Landsbanki and Glitnir were taken over earlier this week.
At the centre of a financial hurricane which has claimed several of the world's biggest banks, Iceland's prime minister has warned of the risk of national bankruptcy.
The central bank has tried then abandoned attempts to prop up its battered currency.
Iceland's Financial Supervisory Authority (FME) said on its website that Kaupthing's domestic deposits were fully guaranteed and that all its domestic branches, call centres, cash machines and Internet operations would be open for business as usual.
'The Icelandic Financial Supervisory Authority has, under powers granted by the Icelandic Parliament, proceeded to take control of Kaupthing,' the authority said.
'The action taken by the FME is a necessary first step in achieving the objectives of the Icelandic Government and Parliament to ensure the continued orderly operation of domestic banking and the safety of domestic deposits.'
Iceland adopted sweeping powers late on Monday that gave the state the ability to dictate banking operations and allow it to push through mergers or even force a bank to declare bankruptcy.
The government swiftly used them to dismiss the board of directors of Landsbanki and put it into receivership.
Glitnir, and now Kaupthing, rapidly followed into the state's clutches.
Home to just 300,000 people in the North Atlantic, Iceland epitomised the global credit boom that turned to bust 15 months ago. Its banks expanded dramatically overseas, investors took large positions in its high-yielding currency and foreign money poured into local projects.
IMF OPTION
Prime Minister Geir Haarde said that Iceland was probably paying the price for punching above its weight.
'What we have learned from this whole exercise over the last few years is that it is not wise for a small country to try to take a leading role in international banking,' he said in a joint interview with news agencies late on Wednesday.
Iceland's banking assets amounted to about nine times its gross domestic product and its current account deficit has billowed to 16 per cent of GDP last year.
Mr Haarde said he had not asked for help from the International Monetary Fund, which has sent a delegation to Reykjavik. But he said assistance from the Fund was 'definitely an option' and separate negotiations to secure a 4 billion euro (US$5.45 billion) loan from Russia would begin next Tuesday.
KAUTPHING BOARD QUITS
Kaupthing said its board had resigned and that it had requested the authorities take control.
In a demonstration of how fast Iceland's crisis is moving, Kaupthing said that as late as Sept 26, directors believed the bank was performing well and that third quarter results would be good.
The final straw came when Britain transferred control of the business of Kaupthing Edge, its Internet bank, to ING Direct and put Kaupthing's UK operations into administration. That put Kaupthing in technical default according to loan agreements.
'It did not matter that the parent company had sufficient liquidity and its position was solid,' Kaupthing said in a statement.
As tension rose between the two countries, British Prime Minister Gordon Brown also threatened legal action on behalf of more than 50,000 savers with Landsbanki's icesave unit, which has frozen its accounts. -- REUTERS
