In yet another rescue act in Europe, Iceland's regulatory authority today said it will take control of Landsbanki, one of the largest banks in the country.
In a statement, Icelandic Financial Supervisory Authority said it would take control of Landsbanki under the powers granted by the Parliament.
"As declared by the government, all domestic deposits are fully guaranteed. Landsbankis domestic branches, call centres, cash machines (ATMs) and internet operations will be open for business as usual.
"The action taken by the IFSA is a necessary first step in achieving the objectives of the Icelandic Government and Parliament to ensure the continued orderly operation of domestic banking and the safety of domestic deposits," the statement said.
Landsbanki is the latest Iceland entity to be hit by the financial turmoil, which is spreading deep into Europe. Earlier, the Iceland government had nationalised another leading lender Glitnir to shore up its fortunes and had moved a legislation to ensure the health of the country's banking sector.
Meanwhile, Landsbanki's UK internet bank icesave today said it is not processing any deposits or any withdrawal requests.
"We are not currently processing any deposits or any withdrawal requests through our Icesave internet accounts. We apologise for any inconvenience this may cause our customers. We hope to provide you with more information shortly," icesave said in a statement posted on its website.
After taking Wall Street titans like Lehman Brothers and Washington Mutual, the credit crisis is claiming victims in Europe and had already seen the fall of European giants including Belgium's Fortis and German mortgage lender Hypo Real Estate.