Skip to: Content
Skip to: Site Navigation
Skip to: Search

August 30, 2008 9:34:16 CDT

Learn about Newser Points »

« Back to the grid | Next story »

Could the Credit Crunch Sink a Whole Country?

Posted Mar 26, 08 9:10 CDT in Business,  World 

(Newser) – The global credit crisis has spelled disaster for banks and hedge funds, but now worry is mounting that an entire country could go under. Yesterday the central bank of Iceland was forced to raise its interest rate 1.25 percentage points to 15% at an emergency meeting, reports the Financial Times. The surprise move was a desperate effort to curb runaway inflation and prop up the krona, a currency in free fall.

"We are a small open economy and we are obviously affected by moves in the international economy," Iceland's central bank governor said. Yesterday's rate cut saw the krona jump, but if confidence in the financial system continues to wane, the country's banks could suffer a run and spell serious trouble for the tiny Nordic nation. One analyst chose his words carefully, saying, "Let’s say Iceland is not in more danger than some Wall Street banks."

Sources Financial Times (UK), Bloomberg

0 comments | Print E-mail | Digg Seed this on Newsvine Add this link to Del.icio.us StumbleUpon

Related Newser Stories

  • Bank of England Pressed to Rein in Inflation

    Aug 13, 08 10:26 CDT
    Bank of England Pressed to Rein in Inflation Great Britain’s inflation rate—driven by energy and food prices rising at the fastest pace in more than 20 years—is on track to hit 5% by autumn, reports the Guardian. The cost of living jumped 0.6% to a 16-year high of 4.4% last month, the largest 1-month jump under the Labor government, boosting pressure on the Bank of England to raise interest rates.
    More »

  • Fed Likely to Hold Rates— for Now

    Jun 25, 08 6:17 CDT
    Fed Likely to Hold Rates— for Now Despite fears that inflationary forces are revving, the Federal Reserve will probably hold the interbank federal funds rate at 2% today, hoping the bargain basement rate can help kick-start a stalled economy that’s been hamstrung by a tenacious housing slump and a credit crunch hangover, Reuters reports. More »

  • Rate-Cut News Sweeps Away Rally

    Apr 30, 08 3:38 PM CDT
    Rate-Cut News Sweeps Away Rally News of today's Fed interest-rate cut swept away a market rally, and stocks ended down. Language in the Fed statement indicating that further trims were unlikely spooked investors, the Wall Street Journal reports, though that news was expected. The Dow ended down 11.81 to 12,820.13; the Nasdaq was off 13.30 to 2,412.80; and the S&P down 5.35 to 1,385.59. More »

  • Fed Ponders Pause in Rate Cuts—After 1 More

    Apr 24, 08 10:05 CDT
    Fed Ponders Pause in Rate Cuts—After 1 More The Federal Reserve may be ready to cool its torrid rate-cutting after a likely .25% percentage point cut at its meeting next week, the Wall Street Journal reports. Futures markets are betting Chairman Ben Bernanke is unlikely to rest just yet, with little change in the month-to-month economic picture, but will pause after that to assess the cuts' effect and avoid stoking inflation. More »

  • Bank of England Cuts Interest Rate

    Apr 10, 08 7:35 CDT
    Bank of England Cuts Interest Rate The Bank of England today cut its benchmark interest rate 25 basis points to 5%, reports Bloomberg, hoping to keep the nation’s economy out of recession. Despite the third cut since December, BoE’s rate remains the highest among the Group of Seven industrialized nations; policymakers have drawn fire for being “behind the curve” in responding to the credit crisis. More »

Reykjavík, the capital of Iceland. Iceland's central bank was forced to raise interest rates to 15% yesterday at an emergency meeting.   ((c) Bob Jagendorf)
Iceland's central bank was forced to raise interest rates to 15% yesterday at an emergency meeting.   ((c) karynsig)
A 100 krónur bill. Iceland's central bank was forced to raise interest rates to 15% yesterday at an emergency meeting.   ((c) James Cridland)
« Prev« Prev | Next »Next » Slideshow
Our editors also recommend:

Threads (1 of 3)

Tags

credit crisis  • inflation  • interest rate cut  • Iceland


Loading...

Premium Articles from HighBeam

Find more articles like this

Today's Most Popular


Other World Stories

What is Newser?

2008 Codie Finalist

Newser gives you more news in less time. We search for the best and most important stories all over the web, read them for you, and deliver concise and sharp summaries—along with links to the full text. Newser provides a way to stay on top of an ever-expanding horizon of news and opinion—politics, sports, business, trends, technology, personalities, crimes, and controversies. Newser keeps you not just better informed, but, with our signature graphic interface and smart condensed format, more enjoyably informed.

Learn more »