Iceland Faces Bank Talks as Krona Risk Contained: Nordic Credit

Iceland is ready to start talks with the creditors of its failed banks as the island tries to unwind a currency overhang that’s blocking foreign investments, its finance minister said.

Parliament last week abandoned a 2013 deadline on the removal of capital controls, which are blocking as much as $8 billion in krona assets from being offloaded. The island imposed the restrictions after its three biggest banks defaulted on $85 billion in 2008, driving the currency down as much as 80 percent against the euro offshore and plunging the nation into its worst recession in six decades.