Iceland: Sheets of Rain, Gale Force Winds, All Foreign Capital Cut Off

international | anti-capitalism | other press Monday October 06, 2008 22:20 by ec

Iceland is deflating at an unbelievable rate. This is a good English language blog tracking the Icelandic economy through the floor. Hope ours doesn't follow it.

"Apropos the last post, our Prime Minister addressed the nation about an hour ago to announce that a bill would be submitted and presumably passed in parliament today [they’d already met with the opposition, who agreed to cooperate] which will give the Financial Supervisory Authority extensive scope to intervene in the operations of Iceland’s financial institutions. We’re talking emergency legislation to deal with this very serious situation.

He was deliberately vague about what this would actually mean in practice, but stressed that deposits are safe [and mentioned something about funds, although whether he means MY funds as per the last post is still unclear, very unsettling]. The bill is being introduced in parliament as we speak [type] and from what I can tell it basically gives the government all and any power necessary to take control of the banks and their operations.

Reading between the lines of the address, it does not seem likely that any more banks will be nationalized or that the government will pump funds into saving them [he basically said what everybody knows - that the Icelandic economy is not big enough to rescue the banks, as they are substantially larger than the GDP of this nation], which presumably means that if they’re going to collapse, then that’s what will have to happen. Apparently the position of the banks has become substantially worse over the course of today as all foreign capital has been cut off. Again - he stressed that people should definitely not panic because all measures will be taken to secure insure the general public against losses."