Iceland will announce on Monday a €1.5bn ($2.1bn, £1.3bn) recapitalisation of its banking sector and unveil a deal to hand control of two of the country's healthy new banks to foreign creditors.
The steps mark an important milestone in efforts to rebuild Iceland's shattered banks and reintegrate the north Atlantic island nation into the international financial system.
The government will issue bonds worth IKr270bn ($2.1bn) next month to three new banks set up last year after the country's three main banks fell victim to the global credit crunch.
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