Europe

Iceland began the early stages of figuring out how to restructure its banks' enormous foreign debts as its economy descends into what its central bank warned Thursday would be a "severe recession," the Wall Street Journal reported today. The IMF board is expected to consider a proposed $2.1 billion loan to Iceland on Friday, part of an effort to shore up several countries caught off guard as liquidity froze amid the financial crisis.

The International Monetary Fund on Wednesday approved a $16.5 billion loan program for Ukraine that includes monetary and exchange rate policy shifts to ease strains from the global financial crisis, Reuters reported yesterday. The IMF said it would immediately disburse $4.5 billion to the government under the two-year loan agreement.

Officials from four Nordic central banks and finance ministries held a private meeting in Stockholm on Wednesday to discuss their contributions to a $6 billion rescue package for Iceland, the Financial Times reported. The gathering was a strong sign that Denmark, Sweden and Finland are drawing closer to announcing a multibillion euro package of loans after Norway agreed a €500m ($648m, £405m) advance last week. The four Nordic nations have said they are willing to support Iceland but only after it agreed to design and implement an economic stabilisation plan in association with the IMF.