THE SIGHT OF A BANK­RUPT CUR­RENCY

Finweek English Edition - - Cover -

on the edge of bank­ruptcy. Its gov­ern­ment is so bank­rupt it can’t help its bank­rupt banks.

The coun­try’s to­tal debt is al­most 1 000% of its gross do­mes­tic prod­uct. Its for­mer friends in Europe no longer want to come to its aid and Ice­land has had to ap­proach Rus­sia for an emer­gency loan.

The value of its cur­rency has col­lapsed. Nev­er­the­less, Ice­land last week re­duced its bank rate from 14,5% to 12% in an ef­fort to save its econ­omy. Inflation is less im­por­tant.

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