Iceland to levy a 'stability tax' on failed banks

Reykjavik

ICELAND is planning to move forward with removing capital controls and imposing a "stability tax" on the estates of its failed banks as early as June, Prime Minister Sigmundur David Gunnlaugsson said on Saturday.

Creditors that lost much of their investments when Kaupthing Bank, Glitnir Bank and LBI defaulted on a combined US$85 billion in debt in 2008, are still waiting for final settlements. Iceland's imposition of controls that same year has blocked efforts to finalise any deals. The restrictions are now blocking about US$5.3 billion in assets from being offloaded.