Iceland said Sunday it had reached a preliminary deal with Britain and other European countries on guidelines for dealing with foreign depositors in a collapsed bank, in an agreement likely to clear the way for a stalled IMF support package. Conflicts with Britain and the Netherlands over the money in Icesave accounts at Landsbanki, the now-collapsed bank, had been delaying billions of dollars in loans for Iceland from the IMF and other lenders. Under newly agreed guidelines, Iceland would cover deposits of insured depositors in the Icesave accounts, the government said. The EU, meanwhile, would “continue to participate in finding arrangements that will allow Iceland to restore its financial system and economy”, it added. Iceland said that France, as holder of the EU presidency, had initiated talks on the deal. Full resolution of the Icesave issue will clear the way for Iceland to receive a $2bn IMF loan, which had been delayed repeatedly as the dispute over compensation payments festered. Separately, Dominique Strauss-Kahn, IMF managing director, said at the weekend that the IMF was close to agreeing a new loan to Turkey.

This entry was posted by Gwen Robinson on Monday, November 17th, 2008 at 5:42 and is filed under Capital markets. Tagged with iceland, IMF, landsbanki. Edit this entry.