Iceland guarantees saving accounts to avoid bank crisis

STOCKHOLM, Oct. 7 (Xinhua) -- Iceland's Prime Minister Geir Haarde said late Monday that the parliament has passed an emergency legislation, which guarantees to protect the saving accounts all bank customers from a national bank crisis.

Under the bill, the country's financial supervisory authority is to take control of commercial bank assets and to appoint the boards. News reports reaching here said the government will take over housing loans and inject government fund into the banks.

"The legislation would help Iceland out because trade in six of Iceland's biggest banks and financial firms has been temporarily halted," said Haarde, adding the danger is real as the Iceland's bank-dominated economy would be sucked along with the banks.

The Icelandic krona has dropped by more than 25 percent against the euro in the past 30 days on concern over the global credit crisis that would cripple the banks and bankrupt the country.

Prime Minister Haarde said the government was only acting with the interests of the nation in mind, even if it means harsh measures against those with vested interests.