Read this carefully and extrapolate.The Icelandic Government...

Read this carefully and extrapolate.

The Icelandic Government seized control of the country’s biggest banks last night in an attempt to fend off wholesale economic collapse.

Turmoil at the banks, whose shares were suspended by the Government yesterday afternoon, had sparked panic in the tiny state, which has a population roughly the size of Coventry.

Queues formed at petrol stations as Icelanders rushed to fill up before reported fuel shortages, while savers who tried to withdraw money from banks or sell bank shares on the internet found websites were not working.

Meanwhile, fears mounted in Britain that the deterioration of Iceland’s two biggest banks — Kaupthing and Landsbanki, whose financial reach stretches farther than their 300,000-strong home nation — could have disastrous consequences for savers, City staff and the high street.

Sources said that Landsbanki and the country’s third-biggest bank, Glitner, will soon be fully nationalised, while Kaupthing had been forced to take state loans.
Savers in Britain also face fallout from the collapse of the Icelandic banking system. Fears mounted yesterday among the 300,000 British savers holding bank accounts with Landsbanki that their deposits were at risk. In the event of a collapse, savers with Kaupthing are entitled to compensation of up to £50,000 from the British authorities — as much as depositors in any British bank — but British savers with Landsbanki are not.