Don't miss

Replay


LATEST SHOWS

PERSPECTIVE

'France has underinvested in early childhood education for many years'

Read more

IN THE PRESS

'Badass': Accolades pour in for Southwest pilot who landed plane after engine failure

Read more

IN THE PRESS

Emmanuel Macron in Berlin: Will Europe's superhero succeed?

Read more

EYE ON AFRICA

Violence in DR Congo's Ituri Province forces thousands to live in camps

Read more

BUSINESS DAILY

Trains, schools & power plants: Latest French strikes cause disruption

Read more

MEDIAWATCH

Fakes, lies and videotape

Read more

THE DEBATE

Cuba without a Castro: A new country on the horizon?

Read more

MIDDLE EAST MATTERS

The beekeeper who helped save Sinjar women

Read more

ENCORE!

Film show: 'Nico, 1988', 'Escobar' and Amir Naderi retrospective

Read more

Business

Government announces recapitalisation of major banks

Text by NEWS WIRES

Latest update : 2009-07-20

Iceland's finance ministry announced a plan on Monday to recapitalise the three major banks it nationalised at the height of the country's financial crisis last October. The government will issue bonds worth 1.5 billion euros.

AFP - Iceland unveiled a 1.5-billion-euro plan on Monday to recapitalise three major banks that it was forced to rescue when the financial crisis devastated its economy last year.

The government will issue bonds to the three new lenders that were born from the ashes of Iceland's biggest commercial banks, pillars of its economy, which were nationalised in October due to a worldwide credit crunch.

"The government is now in a position to capitalise all three of the new banks," Islandsbanki (formerly Glitnir), New Kaupthing and New Landsbanki, a statement from the finance ministry said.

Under the plan, the government will offer controlling stakes in Islandsbanki and New Kaupthing to the old banks' shareholders, while retaining some shares itself. A similar issue was planned for Landsbanki in ongoing discussions.

The issue will be worth a total of 270 billion kronor (1.5 billion euros, 2.12 billion dollars), it said.

"Our agreements announced today are a major step forward in the re-establishment of a strong banking system," Finance Minister Steingrimur Sigfusson said in the statement.

"Not only do today's announcements provide a firm basis for further progress, they also benefit customers of the new banks and the Icelandic economy in general."

The sale of the stakes is scheduled for August 14 and is subject to approval from regulators, the statement said.

Date created : 2009-07-20

COMMENT(S)