Iceland Guarantees Domestic Bank Deposits Amid Crisis (Update1)
"Oct. 6 (Bloomberg) -- Iceland's government pledged to guarantee all domestic bank deposits and gave regulators the power to take over bank assets and appoint new boards to obtain funds from lenders that may become ``inoperable.''
The government's efforts are aimed at ensuring that deposits at Kaupthing Bank hf and Landsbanki Island hf are protected from bank debts that have reached about 12 times the size of the Atlantic Ocean island's economy.
A bill presented to parliament today authorizes the financial supervisory authority to take control of commercial banks' assets and appoint boards, Haarde said.
Today's bill also allows the state-backed Housing Financing Fund to take over banks' mortgage operations."