Iceland said it will borrow €4bn (£3.1bn) from the Russian Treasury, after announcing this morning that it would nationalise its second biggest bank, Landsbanki, and give a £400m loan to its largest lender, Kaupthing.
By Rowena Mason in Reykjavik
Last Updated: 3:24PM BST 07 Oct 2008
The decision to borrow a large sum of money from another country comes just hours after Prime Minister Geir Haarde told the country that borrowing billions of krona could "make the whole Icelandic society bankrupt".
The threat to Iceland's financial sovereignty is seen as the greatest faced by any country since the credit crisis started 14 months ago.
The Russian ambassador to Iceland, Victor Tatarintsev, informed central bank governor David Oddsson early this morning that Russia would provide Iceland with the loan for three to five years at rates 30 to 50 points above Libor. ... (continued at
Financial Crisis: Iceland gets €4bn Russian loan as banks collapse - Telegraph )
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