Iceland freezes share trading
Updated on 06 October 2008
The financial crisis has now put an entire country's economy at risk. Lucy Manning reports.
Iceland has temporarily suspended trading in six major banks and promised savers a 100 per cent deposit guarantee as its government tries to come up with a rescue plan.
After years of rapid boom and a heavy reliance on the finance sector, Iceland has been left perilously exposed and its currency now in freefall.
The Financial Supervisory Authority suspension covers all trading in Kaupthing, Landsbanki, Straumur-Burdaras, Spron, Exista and the recently nationalised Glitnir.
The authority said it "has concluded that uncertainties regarding the issuers are likely to disrupt normal price formation, and as such, any trading could be detrimental for investors".
Many of Iceland's financial companies had taken on large foreign investments. The country's economy is struggling in the wake of the credit crunch, and its currency has declined sharply in value over the past week.
The prime minister, Geir Haarde, announced part of a financial rescue plan late last night. He said Iceland's banks would sell off part of their overseas assets and bring the money back to the country in an attempt to shore up the domestic economy.
