Iceland Goes Belly Up
Three major banks, 300,000 people and zero liquidity. It's not often that the wealth of an entire country is wiped out. But Iceland almost managed that when its currency, the kroner, got caught in a freefall created when investors bailed. Its billions of dollars of Euro-denominated foreign debts became unpayable. Caught in the middle: depositors in Great Britain and Germany, who were lured by rich rates being offered by Kaupthing Bank hf, Landsbanki and Glitnir Bank hf. The IMF is providing a $2.1 billion loan while Finland, Sweden, Norway and Denmark will provide a further $2.5 billion. German also coughed up a couple hundred million, which will be used to make German depositors whole. Iceland is even talking to the Russians for help. Iceland is broke, but it's got geothermal heating, so at least no one will freeze to death.