The IMF board is expected to consider a proposed $2.1 loan to Iceland on Friday 7th

As it waited for the International Monetary Fund to approve a proposed emergency loan, Iceland began the early stages of figuring out how to restructure its banks' enormous foreign debts as its economy descends into what its central bank warned Thursday would be a "severe recession."

The IMF's $2.1 billion loan is part of the IMF's steps to shore up several countries caught off guard as liquidity froze amid the financial crisis. The IMF board is expected to consider a proposed $15.7 billion loan to Hungary on Thursday and Iceland's loan on Friday. Ukraine received a $16.4 billion emergency loan ...