LONDON, Oct 5 (Reuters) - Icelandic authorities are in talks with its central bank and top pension funds to inject up to 10 billion euros ($13.86 billion) into the country's ailing banking system, The Sunday Telegraph newspaper said.
The report said Iceland's prime minister was leading the talks, with an announcement on its plans expected on Monday morning. The newspaper did not name sources, while the Icelandic government could not immediately be reached for comment.
An adviser to the government said on Friday a stability plan was in the works, while the head of Sedlabanki, Iceland's central bank, added that the situation was grave but not a cause for despair.
The talks are partly a result of concerns surrounding the financial position at Kaupthing, the country's biggest bank, the Sunday Telegraph said. But the group's chairman on Sunday defended the health of the company.
'Over the years we have built a strong and well-diversified bank ... We have some of the strongest capital ratios in European bank sector,' Sigurdur Einarsson said in a statement.
'We've got good asset quality and a highly diversified loan portfolio. In fact, 70 percent of our business is outside Iceland.
'Kaupthing has and continues to manage its business prudently and, with our strong fundamentals, we are naturally concerned when we hear malicious rumours and sensationalism about Kaupthing being reflected irresponsibly,' he added.
Iceland's government last week took control of bank Glitnir to save it from failure [ID:nL3358691].
(Reporting by John Bowker; Editing by Erica Billingham) ($1=.7216 Euro) Keywords: ICELAND BANKS/ tf.TFN-Europe_newsdesk@thomson.com vjt COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
The report said Iceland's prime minister was leading the talks, with an announcement on its plans expected on Monday morning. The newspaper did not name sources, while the Icelandic government could not immediately be reached for comment.
An adviser to the government said on Friday a stability plan was in the works, while the head of Sedlabanki, Iceland's central bank, added that the situation was grave but not a cause for despair.
The talks are partly a result of concerns surrounding the financial position at Kaupthing, the country's biggest bank, the Sunday Telegraph said. But the group's chairman on Sunday defended the health of the company.
'Over the years we have built a strong and well-diversified bank ... We have some of the strongest capital ratios in European bank sector,' Sigurdur Einarsson said in a statement.
'We've got good asset quality and a highly diversified loan portfolio. In fact, 70 percent of our business is outside Iceland.
'Kaupthing has and continues to manage its business prudently and, with our strong fundamentals, we are naturally concerned when we hear malicious rumours and sensationalism about Kaupthing being reflected irresponsibly,' he added.
Iceland's government last week took control of bank Glitnir to save it from failure [ID:nL3358691].
(Reporting by John Bowker; Editing by Erica Billingham) ($1=.7216 Euro) Keywords: ICELAND BANKS/ tf.TFN-Europe_newsdesk@thomson.com vjt COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
© 2008 AFX News