Bank Failure Spreads, Icelandic FSA Takesover Landsbanki

The Icelandic FSA confirms that it has taken over Landsbanki. Last night, the Icelandic parliament approved a bill giving the government extended power to take over the country's banks, to ensure stability. It was already yesterday expected that Landsbanki, the country's second largest bank, and Glitner, the third largest bank, would soon be fully nationalised. In a statement today, the Icelandic Financial Services Authority said it would take over Landsbanki "to ensure continued commercial bank operations in Iceland". Meanwhile, Iceland's largest bank Kaupthing says it has not been approached by the Icelandic FSA but stated that the central bank had provided it with a EUR 0.5 bln loan.