The central banks of Norway, Sweden and Denmark have joined forces in a stunning move to rescue Iceland, offering a credit line of €1.5bn (£1.2bn) to beat back speculators and shore up the battered krona.
The solidarity gesture is a powerful signal to hedge funds betting on Iceland's downfall that they are up against the international system. The swap accord doubles the foreign reserve cover of the Icelandic government at a stroke.
Iceland's central bank said the deal was a "precautionary measure" to stabilise the currency, which has crashed 25pc this year.
Stefan Ingves, head of Sweden's Riksbank, said the accord aimed to restore stability after months of mayhem. The Icelandic krona surged 3.7pc on the news.
As I recall, Iceland was one of the SNP's favoured examples of how small countries might prosper. I imagine that we will not hear so much about 'the arc of prosperity' from now on.
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