The Hindu Business Line : Iceland govt steps to salvage battered economy

REYKJAVIK (Iceland): Iceland's biggest bank got an emergency loan from Sweden and Britain as the financial crisis engulfing the tiny Nordic nation showed no signs of easing up.

In recent days, Iceland's government has taken over the country's second-biggest bank Kaupthing, fixed the exchange rate to shore up its plummeting currency, and asked Russia for a euro 4 billion loan as it scrambles to stop the collapse of its economy. It has also introduced emergency laws that give the government sweeping new powers to take over companies, limit the authority of boards, and call shareholder meetings.

The Icelandic central bank had to forsake efforts to defend the country's currency and the government seized control of a second big bank as the global financial storm battered the island's economy. Prime Minister Geir Haarde said Iceland had not asked f or help from the International Monetary Fund, which has sent a delegation to Reykjavik on a fact-finding mission.

Sweden said it would grant liquidity assistance to the Swedish arm of Icelandic bank Kaupthing with a loan of up to $702 million.

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