Iceland Ruling May Save Banks $4 Billion in Losses
This article is for subscribers only.
Iceland’s banks may be spared as much as $4 billion in currency losses after the country’s top court ruled they can charge higher rates on loans affected by a foreign-currency lending ban.
The decision allows the island’s lenders, state-created successors to banks that failed in 2008, to charge borrowing costs that track the central bank’s main rate instead of rates attached to loans originally indexed to foreign currencies such as Swiss francs or Japanese yen.