Iceland: Stand-By Arrangement: Interim Review Under the Emergency Financing Mechanism

• Main Author: International Monetary Fund
• Format: Report
• Language: unknown
• Subjects: Iceland
• Online Access: http://www.imf.org/external/pubs/cat/longres.aspx?sk=22696

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