5. Prime Minister of Iceland, Geir H. Haarde walking into news conference
6. SOUNDBITE: (English) Geir H. Haarde, Prime Minister of Iceland:
"The legislation that we introduced yesterday was passed by the parliament last night. We think that is a very important step in our efforts to stabilise the situation here and make sure that we have a functioning bank system. And also showing that we are preoccupied. Our primary concern is the sustainability of the banking system as well as the best interests of the Icelandic people."
8. SOUNDBITE: (English) Geir H. Haarde, Prime Minister of Iceland:
"Today I made it public that we had been talking to Russia about a currency loan. We will be sending people to Moscow today or tomorrow to negotiate with Russia on the terms and conditions and so on, on this loan that will be an addition to our foreign currency reserves and not intended to be lent onwards to any financial institution. We think that Russia is taking a very friendly position on this and we are very pleased that this announcement was made this morning."
10. SOUNDBITE: (English) Geir H. Haarde, Prime Minister of Iceland:
"The idea of what we are doing here is to separate the domestic operations of the banks who are in trouble, bank or banks, from the international operations. But that will continue to the extent possible. I'm not aware of the particular details as far as Icesave is concerned."
Iceland has nationalised its second-largest bank under day-old emergency legislation and says it is negotiating a euro 4 billion (5.4 (b) billion US dollar) loan from Russia to shore up the nation's finances amid a full-blown financial crisis.
The central bank has also loaned euro 500 (m) million (680 (m) million US dollars) to Kaupthing, the country's biggest bank.
As the government scrambled to gain control, the central bank first announced that it had secured the Russian loan, then backtracked and said the countries had agreed to open talks on "financial issues" soon.
The takeover of Landsbanki came a day after trading in shares of major banks was suspended, the Icelandic krona lost a quarter of its value against the euro, and the government rushed through emergency legislation giving it sweeping powers to deal with the financial meltdown.
"Our primary concern is the sustainability of the banking system as well as the best interests of the Icelandic people," Iceland's Prime Minister Geir H. Haarde said on Tuesday.
He also said Russia was taking "a very friendly position" with regards to talks over a possible loan.
A loan from Russia would support the government's efforts to gain control of an increasingly dire financial situation, which saw the government coming to rescue of the third-largest bank, Glitnir, only last week.
Prime Minister Geir H. Haarde warned late on Monday that the heavy exposure of the tiny country's banking sector to the global financial turmoil raised the spectre of "national bankruptcy."
Meanwhile, Iceland's largest bank, Kaupthing said on Tuesday that it has received a 680 (m) million US dollar loan from the Icelandic central bank.
But said it has not been approached by the country's financial regulator about any possible state intervention.
Iceland is paying the price for an economic boom of recent years that saw its newly affluent companies go on an acquisition spree across Europe and its banking sector grow to dwarf the rest of the economy.
Bank assets are nine times annual gross domestic product of 19 (b) billion US dollars.
Investors are now punishing the whole country for the banking sector's heavy exposure to the global credit squeeze - its currency has gone through the floor, imports have fallen and inflation is soaring.
A collapse of the Icelandic financial system could reverberate across Europe, given the heavy investment by Icelandic banks and companies across the continent.
One of the country's biggest companies, retailing investment group Baugur, owns or has stakes in dozens of major European retailers - including enough to make it the largest private company in Britain, where it owns a handful of well-known stores such as the famous toy store Hamley's.
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