Britain’s Prime Minister Gordon Brown has told Iceland Prime Minister Geir Haarde that he is considering legal action against the island nation over the collapse of its national banks.
Brown said that Iceland's decision not to recompense those with savings in their banks was "completely unacceptable" and the British government would do "whatever is necessary to recover the money".
The UK government is freezing the assets of Icelandic companies.
Haarde, urged his country to not panic after a third bank toppled today, and asked the public to hold back from drawing large amounts of money in attempt to salvage their savings.
The financial meltdown in Iceland continued today when Kaupthing Bank became the third bank to fall into the hands of the authorities, and trading on the Iceland stock market was halted.
Kaupthing Bank currently operates in thirteen countries; including all the Nordic countries, Belgium, Luxembourg, Switzerland, the United Kingdom and the United States.
The collapse of Iceland's biggest bank comes just days after Glitnir and Landsbanki were also nationalized. Virtually the entire Icelandic banking system is now under state control.
Haarde has warned the situation is putting Iceland at risk of "national bankruptcy".
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