Icelandic foreign exchange freezes as governments argue over assets

Local exporters, expatriates and international groups trying to do business in the country all complained yesterday that they were suffering as a result of the two governments' actions.

A number of private equity firms, including TPG and Permira, are competing with Sir Philip Green, the UK retail entrepreneur, for the £1bn-£2bn of debt held by collapsed Icelandic banks in Baugur, the retail investor that has stakes in Karen Millen and House of Fraser.

But one of the potential acquirers said yesterday that “nothing is going to get done” for the foreseeable future because of the stalled payment system, which is reducing money transfers in and out of Iceland to a trickle.

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