Icelandic krona grinds to halt on takeover

Trading in the Icelandic krona ground to a halt after the government seized control of Kaupthing Bank hf, the nation's biggest lender, as the financial crisis deepens.

There haven't been any so-called spot trades today in krona, or transactions in which currency must be exchanged immediately, according to Copenhagen-based Nordea Bank AB and TD Securities Ltd in London. The last recorded spot trade was priced at 340 krona per euro, Nordea said. Regulators earlier this week took over Iceland's second and third-largest lenders, Glitnir Bank hf and Landsbanki Islands hf, which acted as clearing houses for trades in the krona.

"Effectively the krona can't be traded at the moment because there are no more banks to clear the trade," said Mick Ankjaer, a foreign-exchange dealer at Nordea in Copenhagen.