Iceland lifts foreign capital bans for Pension Funds to invest abroad
Iceland lifted its remaining capital curbs on Tuesday, ending more than eight years of controls on businesses and citizens put in place after its banks collapsed during the financial crisis.
Icelandic lenders buckled under the weight of huge debts amassed over years of overseas expansion, spreading instability through other European nations and making the country a symbol of the excesses that helped to trigger the financial crash.
The government started dismantling capital controls last year by easing restrictions for local residents in a nation of only around 330,000 people. The end of the last controls, first announced on Sunday, came into force at midnight.
Iceland hopes the move will open the way for investment by Icelandic pension funds abroad and improve prospects for foreign investment in the country.
A small and volatile currency has exacerbated Iceland’s economic troubles and will need to be carefully managed.
The Icelandic crown remains at historically strong levels but posted its biggest one-day decline in eight years on Monday as the end of controls was expected to trigger initial outflows of pent-up foreign and domestic money.
Full Content: Reuters
