Tuesday, October 7, 2008

Iceland’s Frozen Banking Sector

From MarketBeat:
How do you know your country’s finances are in trouble? When you’re looking to Russia for a loan.

The worldwide turmoil in the banking system did not originate in Iceland, and will not end in Iceland, but that country may be one of the hardest-hit. The country is in the midst of trying to secure loans for its largest banks, in part from Russia, and announced plans to peg its currency to the euro, one that will likely be vulnerable to speculators.

“You sort of liken this to Thailand in 1998,” says Win Thin, currency strategist at Brown Brothers Harriman. “It wasn’t really the cause of the crisis and wasn’t a major factor in the crisis but it was sort of like the epicenter — all of the conditions were present there, almost like a little test tube.">>>MORE