Iceland’s former central bank chief had warned about the country’s oversized banks before they went bust in 2008, he said yesterday at the trial of a former prime minister for failing to prevent the crisis.

The Government should consider investigating how ministers and senior civil servants handled the banking collapse, it was claimed today.

The Big Mac, long a symbol of globalisation, has become the latest victim of Iceland’s overexposure to the world financial crisis.

Europe’s longest-serving prime minister won a narrow electoral victory today while his strongest challenger, the former Reykjavik mayor seeking to become the nation’s first female leader, failed to win a seat in Parliament.