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FINANCIAL CRISIS

Iceland sends out SOS to Fed and ECB

Text by: AFP
1 min

Iceland's central bank has asked the European Central Bank, the Federal Reserve and Nordic banks to help bail the country out of a crisis that has the potential for national bankruptcy. The IMF has already lent the country 2.1 billion dollars.

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Iceland's central bank has asked the European Central Bank and the US Federal Reserve for financial aid to help it out of the financial crisis, Iceland's Prime Minister Geir Haarde said on Tuesday.

"Iceland's central bank sent a request to the ECB, the Fed and the Nordic banks on Friday," Haarde told reporters in the Finnish capital.

He said Iceland had not yet received an answer to its request.

Iceland's once booming financial sector has collapsed under the weight of the worldwide credit crunch, forcing the government to take control of the major banks as its currency has nosedived.

Reykjavik agreed with the International Monetary Fund last week on a loan of 2.1 billion dollars (1.6 billion euros) but Haarde had said on Monday that Iceland would need about four billion dollars more.

 

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