High court's ruling might hinder Iceland's recovery, Fitch warns

07/18/2010 | Bloomberg Businessweek

The Supreme Court of Iceland banned loans that are indexed to foreign exchange rates, a ruling that might cost lenders as much as $4.3 billion, said Finance Minister Steingrimur Sigfusson. Fitch Ratings said the ruling might threaten efforts to rein in capital controls and restore financial stability. "It is likely to have negative implications for the stability of the financial system, the public finances and the timing of any economic recovery," said Fitch Senior Director Paul Rawkins.

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