Glitnir creditors take over 95 pct of Islandsbanki

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2009-10-14 23

Iceland has agreed to hand creditors of failed bank Glitnir a 95 percent stake in smaller lender Islandsbanki in payment for losses suffered in last year's banking sector collapse.

Iceland's top commercial banks were brought down by the global financial crisis last October, plunging the Icelandic economy into deep recession and forcing the nation to seek billions of dollars in aid from the International Monetary Fund and other lenders.

Iceland's three biggest banks -- Glitnir, Landsbanki and Kaupthing -- folded within a week a year ago this month, owing more than $60 billion to foreign lenders, and both Landsbanki and Kaupthing have yet to reach agreements with their creditors.