Iceland nationalizes its last major bank

STOCKHOLM, March 9 (Chinese media) -- Iceland's investment bank Straumur-Burdaras were taken over by the Icelandic Financial Supervisory Authority (ISFA) on Monday, said news reaching here from Reykjavik.

The bank was the last of Iceland's four major banks to be nationalized. The other three were seized by ISFA after the country's financial system collapsed under the weight of foreign debt last October.

ISFA suspended the bank's board and appointed a committee to take over its management after Straumur's report that its liquidity position was no longer strong enough to sustain the operations, ISFA said in a statement.

Straumur had consistently tried to reassure the market that it remained relatively well capitalized, and that its operations could again become profitable and its loan book would eventually shrug off growing provisions to become sustainable.

But a collapse of global liquidity, coupled with continued absence of confidence in Icelandic banks, eventually made it impossible for Straumur to fund its ongoing operations.

"In spite of its strong capital position and the support of funding banks, Straumur believes its liquidity position is no longer strong enough to sustain activities," the bank said.

Straumur operates in Iceland, Denmark, Sweden, Finland, Poland and the Czech Republic.