Iceland Shuts Stock Market, Nationalizes No. 1 Bank

Overexposed Nordic nation sinks deeper into financial crisis
By Jason Farago,  Newser Staff
Posted Oct 9, 2008 6:09 AM CDT
A man walks past a branch of the Kaupthing bank in Reykjavik Wednesday Oct. 8, 2008. The Icelandic government nationalized Kaupthing today, just hours before the stock market was shut.   (AP Photo/Arni Torfason)
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(Newser) – Iceland shut down its stock exchange today due to "unusual market conditions" and will keep it closed until Monday, the AP reports. The move came just hours after the Icelandic government nationalized Kaupthing, the nation's largest bank and the third to come into public ownership. An IMF delegation has arrived in Reykjavik, and Iceland's prime minister said that emergency assistance was "an option."

Kaupthing's entire board has resigned after asking that the government take control of the company. The collapse of Iceland's oversized financial sector—banking assets were nine times the country's GDP—has had severe economic repercussions. Its currency, the krona, has lost more than 50% of its value this year, and PM Geir Haarde has warned that the country faces bankruptcy.