February 22, 2008: Financial Website Warns of Icelandic Bank’s Instability, Bank Will Later Collapse

The British financial website “This is Money” warns about the stability of the Kaupthing Edge banking product. Kaupthing Edge is a brand used to attract depositors by the Icelandic Kaupthing Bank. In response to a reader’s question about the brand’s soundness, correspondent Alan O’Sullivan points out that the rating agency Moody’s has recently described Icelandic banks as “fragile” and that its borrowing costs have increased 400% in the last year. For this reason, analysts think it is far more likely to default than any other European bank. As a result, O’Sullivan recommends that savers do not maintain balances on accounts with the bank in excess of the maximum limit on deposit insurance. [This is Money, 2/22/2008] Kaupthing Bank will collapse seven and a half months later. [Reuters, 10/9/2008]