• OCTOBER 8, 2008

Iceland Seeks an Emergency Loan From Moscow

In Attempt to Shore Up Financial System, Government Also Seizes a Second Big Bank and Tries to Peg Currency

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REYKJAVÍK, Iceland -- Iceland sought to avert the collapse of its financial system Tuesday by reaching out to Russia for an emergency loan, trying to peg its plummeting currency and seizing a second big bank.

The moves reflected the desperation of the nation of 300,000 people, which with limited resources is searching for help to shore up Icelandic banks holding debt that dwarfs the nation's economic output. The crisis has strained Iceland's own balance sheet, sparking worries about the country's sovereign debt and hence its future ability to borrow.

The country's plight also highlights the risks for other nations that ...

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