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| IMF approves $2.1bn Iceland loan | |
| (30 minutes later) | |
| The International Monetary Fund (IMF) has approved a $2.1bn (£1.4bn) loan for Iceland, after the country's banking system collapsed in October. | The International Monetary Fund (IMF) has approved a $2.1bn (£1.4bn) loan for Iceland, after the country's banking system collapsed in October. |
| The two-year loan was designed to help the country cope with what the IMF described as "a banking crisis of extraordinary proportions". | The two-year loan was designed to help the country cope with what the IMF described as "a banking crisis of extraordinary proportions". |
| The loan aimed to help the country "to restore confidence and stabilise the economy", the IMF said in a statement. | The loan aimed to help the country "to restore confidence and stabilise the economy", the IMF said in a statement. |
| Iceland is the first Western European nation to get an IMF loan since 1976. | Iceland is the first Western European nation to get an IMF loan since 1976. |
| The two-year loan, which is subject to quarterly review, allows the country to withdraw about$827m now, and the rest in eight instalments of some $155m. | |
| Iceland's government had expressed frustration last week at delays in the loan's approval. | |
| Contracting economy | |
| Iceland was forced to take over three of its biggest, debt-laden banks last month. | |
| The Nordic nation's troubles have had severe repercussions elsewhere in Europe. | |
| In the UK, individual savers and local councils have been unable to access funds deposited in Icelandic banks. | |
| Iceland's currency, the krona, has almost halved in value this year and banking transactions with other countries have almost completely frozen. | |
| The IMF has warned the country's economy could contract by as much as 10% next year. | |
| Iceland has said the IMF funds will be used to stabilise its currency, reintroduce a flexible interest rate regime and to overhaul its financial regulation system, especially insolvency laws. | |
| Before going to the IMF, it had been in talks with Russia for a $4bn loan, but discussions broke down. |