Iceland will this week tell hedge funds and other creditors in its failed banks how their claims can be settled. 

Iceland didn’t break the law by refusing to compensate British and Dutch customers of Landsbanki Islands after the lender collapsed, a European court ruled.

INSURANCE against Ireland defaulting on its €85.32 billion national debt has soared on fears the cost of rescuing Anglo Irish Bank will rise, indicating the market believes there is a one-in-four chance of a default.