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

1ISLEA2009002 Image
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Release Date: © February, 2009
ISBN : 978-1-45181-940-3
Stock #: 1ISLEA2009002
Stock Status: On back-order

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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.


Capital markets , Economic policy , Financial crisis , Financial institutions and markets , Fiscal policy , International financial system , Monetary policy

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