| Summary: | This paper describes the Stand-By Arrangement for Iceland under the Emergency Financing Mechanism. The crisis is producing a sharp contraction of economic activity. Indicators of consumption are plummeting, and the deterioration in the labor market is accelerating, with rising unemployment and falling real wages contributing to a considerable contraction in real incomes. Significant import compression is under way, allowing a sustained turnaround in the trade balance, as exports continue to benefit from a weaker króna. The króna interbank market is inactive, and equity markets remain under pressure with trade being thin. ISCR;CR;amount;bank;debt;Iceland;central bank;króna; exchange rate; bank asset valuation methodology; bank recapitalization timetable; bank restructuring committee; short-term debt; debt management; Loans
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