Icelandic banks have been ordered to start selling foreign-owned assets to help the country avoid bankruptcy.
According to The Daily Telegraph, the order came from the Icelandic prime minister Geir Haarde, who has spent the last three days locked in urgent talks to try to save the country’s economy from collapsing.
Last night he addressed the country on national television and warned that the economic situation had worsened. He said: "There is a very real danger that the Icelandic economy in the worst case could be sucked with the banks into the whirlpool and the result could be national bankruptcy."
He said that the country's major banks had agreed to sell assets and decrease foreign activity.
His address came as shares in all Icelandic banks and investment companies were suspended on the Reykjavik stock market.
The Icelandic banking crisis has sparked fears that it the UK high street will be affected. However, Gunnar Sigurdsson, chief executive of Icelandic investment group Baugur, which has interests in UK retailers including House of Fraser and Mosaic Fashions, yesterday reassured the market that its business portfolio would not be impacted by the Icelandic banking crisis.