Iceland to get $6billion IMF rescue package

21 October 2008 / by Rachael Stiles
Iceland will reportedly be getting a $6billion rescue package from the International Monetary Fund to help it survive the economic storm which is currently ravaging the island.

Although not confirmed, it is thought that the IMF will contribute $1billion to Iceland, and further support is expected from Scandinavia and Japan.

Iceland's three biggest banks – Landsbanki Islands hf, the owner of UK savings account provider Icesave, Kaupthing Bank hf, and Glitnir Bank hf – were all nationalised as they buckled under the weight of $61billion of debts.

The UK has offered to lend Landsbanki £100million in order to secure compensation for Brits who have money frozen in Icesave savings accounts.

Relations between the UK and Iceland have soured after the Icelandic Government said it would be unable to pay compensation to its British savers, causing Gordon Brown to use anti-terrorist laws to freeze billions of pounds in Icelandic assets in the UK.

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UK savers who have cash in the nationalised Kaupthing Edge and Heritable Bank will have their deposits transferred to ING Direct savings accounts after the Dutch ING group bought out the savings arms of both banks.

It has since been announced that ING – which said just weeks ago, when it announced the take-overs, that it was "in a position of strength" – will be getting a €10billion cash injection from the Dutch Government, part of a €20billion plan to boost confidence in the economy by making capital available to financial institutions.

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