The Icelandic government took control of the country’s largest bank, Kaupthing, today as it struggled to prevent a collapse in its entire banking system.
The decision means that all three of the country’s major banks are now under the control of Iceland’s Financial Supervisory Authority.
The authority said the action was necessary to ensure the “continued orderly operation of domestic banking and the safety of domestic deposits”.
It said Kaupthing would be open for business as usual today.
The Icelandic government has already seized control of Landsbanki and Glitnir after prime minister Geir Haarde warned that the country was at risk of “national bankruptcy”.