Skip to main content

Iceland to Announce Rescue Plan `Very Soon,' Herbertsson Says

By Tasneem Brogger
Oct. 3 (Bloomberg) -- Iceland's government will ``very
soon'' announce a plan to inject liquidity into the financial
system, the prime minister's economic adviser Tryggvi
Herbertsson said.
``We're working on a plan,'' Herbertsson said in a
telephone interview out of Reykjavik today. ``It's obvious that
if you look at the markets that we have to do it very soon.''
The krona has plunged 12 percent against the euro this week
on a series of rating downgrades and after the government bailed
out the No. 3 lender, Glitnir Bank hf. The government is working
``day and night'' to secure a foreign loan, Minister for Banking
Affairs Bjorgvin Sigurdsson told television station Stod 2 late
yesterday.
Herbertsson declined to provide details of the plan. He
ruled out a loan from the International Monetary Fund.
``The money that the IMF would be able to provide would be
minimal,'' Herbertsson said. ``We're an industrialized country,
the fifth-richest country in the world per capita. We are
working on various measures to provide liquidity to the economy
and you'll see that soon, but the IMF is not an option.''
The government's decision to bail out Glitnir through the
purchase of a 75 percent stake will probably be the only rescue
of a commercial lender, according to Herbertsson.
``Glitnir is what had to be done,'' he said. ``The other
banks are in a much better position and we don't think we need
to go into those banks. But having said that, it's obvious that
this can change in a few days.''

`No Hurry'

The government is in ``no hurry'' to sell its stake in
Glitnir, Herbertsson said.
``We'll hold a stake until it is certain that the bank is
in a good position and until somebody who we trust can come in
and buy the bank,'' Herbertsson said. ``If it's one month, then
it's one month. If it's two years, then it's two years.''
In the 24 hours after the collapse of Glitnir, Standard &
Poor's and Fitch Ratings lowered the country's rating and
Moody's Investors Service put Iceland's national Aa1 rating on
review for a potential downgrade.
``The economic situation has in a short space of time
changed very much for the worse,'' Prime Minister Geir H. Haarde
said in a speech to parliament last night. ``Government,
companies, households and people have seldom faced such great
difficulties.''

Waiting

Iceland's central bank has done little to ease the
liquidity shortage, even as central banks across the rest of
Europe and in the U.S. pump money into their financial system
and help their banks.
``Everybody is basically waiting for the central bank to do
something,'' said Beat Siegenthaler, a senior strategist at TD
Securities in London. ``They're the only central bank around the
world that hasn't stepped in, in some way, to support their
financial sector. At the moment the feeling is that they're just
nowhere, they're just not present''
The slump in the krona will probably send the inflation
rate as high as 20 percent, compared with the central bank's
target of 2.5 percent, Siegenthaler said. Consumer prices rose
an annual 14 percent in September.
``Many traders are saying they've never seen a currency
lose as much in such a short time and without the central bank
saying anything or attempting any kind of supportive measures,''
he said.

Comments

Popular posts from this blog

Världens läskigaste spindel

Goliath Bird Eating Spider It's frequently described as "larger than a dinner plate," presumably because spider-scientists don't want to freak people out with the significantly more relevant "big enough to fit over your face." It's a foot across and, when it's in the mood, brings down entire birds and eats them. It doesn't make webs, or leap great distances--it just slowly sneaks up behind things and jumps on them. Yes, just like in your nightmares. Go ahead and check behind you. We'll wait. As if a giant spider that can bring down a moderate-sized flying animal wasn't bad enough, it's one of the "hissing bastard spiders" (that's actually its full scientific name), the creepiest creature to exist outside of a horror novel. At this point, evolution clearly just started piling in everything nasty that could possibly fit: Its spit can dissolve flesh down to the bone AND it can shoot invisible hairs that cut your eyes and mo...

Smyger igång lite...

Jag har visst ställt om lite på sistone och har skaffat mig en ny "hobby"... ...nämligen hållbarhet och ett skönare, lugnare och stressfriare liv. Och visst har jag tankar på att skriva något om det framöver - men just idag blir det ett gnällmail som jag just skickat till Järfälla kommun om dessa förbaskade lövblåsare. Så vi inleder min återuppståndelse på detta forumet med det. Lovar i sin tur att återkoppla med svaret, om och när jag får det... Hej, Då jag lämnade min yngste son på förskolan i veckan reagerade jag på att det satt en lapp uppsatt på grinden till gården. På denna lapp meddelade er Entreprenör (Svensk Markservice) att det var dags för höststädning på gården och att det därför bla. kunde vara högljutt när denna städning utförders. Jag blev då påmind om härom veckan när jag gick med den äldre sonen till skolan och (gissningsvis samma) Entreprenör utförde höststädning på skolgården. Då går det män med bensindrivna lövblåsare (vissa av dem med munskyd...

Årets bästa poddavsnitt

(Inser efter förra inlägget, att jag ju självklart måste skriva detta inlägget också :-)) Innan jag kommer till årets i min mening bästa poddavsnitt, måste jag börja med förra årets bästa. Med bästa i den mening att den gett mig mest att fundera på och som jag själv mest tipsat om. Podden är Magnus Carlssons (han från Weeping Willows) Sommar i P1 . Och den handlar om följande: “Magnus Carlson ringer upp forskaren Elin Röös, metrologen och naturskadespecialisten Pär Holmgren, debattören och ordförande i företagsforumet Circular Sweden: Anders Wijkman och flera andra för att få svar på hur vi kan göra för att lösa de problem som hotar miljön. Svaren han får handlar om både vad man som enskild kan göra i det lilla, och hur man kan göra för att påverka beslutsfattare i de stora frågorna .” Har du inte hört det; gör det omgående. Men då till årets poddavsnitt, som delvis är i samma tema, men ändå inte. P3 Dystopia har många riktigt bra (och läskiga) avsnitt, men det ...