Icelanders in Reykjavik protesting the government's handling of the financial crisis on Wednesday. The slogan on the shirt worn by the man at right reads "Your bank does not care about you." (Įrni Torfason/The Associated Press)

Iceland is all but officially bankrupt


REYKJAVIK: People go bankrupt all the time. Companies do, too. But countries?

Iceland was on the verge of doing exactly that on Thursday as the government shut down the stock market and seized control of its last major independent bank. That brought trading in the country's currency to a halt, with foreign banks no longer willing to take Icelandic krona, even at fire-sale rates.

As the meltdown in the Icelandic financial system quickened, with the government seemingly powerless to do anything about it, analysts said there was probably only one realistic option left: for Iceland to be bailed out by the International Monetary Fund.

"Iceland is bankrupt," said Arsaell Valfells, a professor at the University of Iceland. "The Icelandic krona is history. The IMF has to come and rescue us."

Continued here:

Iceland is all but officially bankrupt - International Herald Tribune

Perhaps Butterfly ought to replace the professor and become the new professor at the University of Iceland in order to explain that, in fact, all is well!