As I predicted earlier this week, the guarantee by the Icelandic authorities re bank deposits was not worth the newspapers it was printed in.
Icesave, the online British arm of Iceland's second biggest bank Landsbanki, announced yesterday that its customers could no longer withdraw or deposit money, as Landsbanki was taken into receivership.
The Icelandic government then reneged on their pledge to guarantee deposits.
Alistair Darling told the BBC:
"The Icelandic government have told me, believe it or not, they have no intention of honouring their obligations there."
The Icelandic authorities, by reneging on their pledge, have signed the death warrant of their economy.
Gordon Brown is threatening to sue the Icelandic authorities.
Brown has also set out a radical £500BN package today to save the British banking sector from collapse and break the damaging logjam in credit markets.
At last, some much needed action!