Icelandic bank loses independence

All major Icelandic banks have now been taken over by the authorities

The last major Icelandic bank left standing after the country's financial collapse in October is being closed down by the financial authorities.

Straumur Burdaras has been taken over by the Icelandic Financial Supervisory Authority (IFSA), which said it was now in the process of closing the business.

The Icelandic government took control of the country's three biggest banks in October last year.

The authority said that all deposits at Straumur are fully secure.

'Unsustainable'

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

The IFSA has suspended the bank's board and appointed a resolution committee to decide on how best to resolve the bank's problems.

"As a result of this, Straumur is closed," the statement said.

The bank's chief executive, William Fall, has resigned with immediate effect.

Bad debt

Iceland's financial sector collapsed last October due to billions of dollars of bad debt.

As a direct result, the country's three biggest banks have been taken over by the authorities.

First to lose independence was First Glitnir, closely followed by Landsbanki, which owns Icesave - an internet bank used by many UK customers.

Finally, Iceland's biggest bank, Kaupthing, was nationalised in October.

The International Monetary Fund (IMF) then agreed to an emergency loan of $2.1bn (�1.5bn; 1.7bn euros) to prop up the country's fragile economy.