Iceland's central bank said today almost a quarter of households in the crisis-hit North Atlantic island nation were having trouble meeting payments and could need additional support.
The Sedlabanki said in its financial stability report that its examination of Icelandic households in the wake of the 2008 collapse of the island's main banks and currency showed many were still facing daunting economic problems.
"The results indicate that, at the present time, 23 per cent of households are likely to be in financial distress and might need further assistance," it said in the report.
The central bank said these households were likely to have difficulty covering debt payments and living expenses.
Iceland's centre-left government, in co-operation with the island's financial institutions, has rolled out a string of measures to ease the burden of households, many of whom had large loans in foreign currency when the crisis hit.
Measures to support a population that has seen the value of their homes plunge while unemployment has risen sharply, have included reductions of loan principals, but the central bank said more might be needed.
"These measures do not suffice for all borrowers," it said.
"In order to find their way through their financial difficulties the remaining households need further assistance, need to sell assets and downsize or if there is no other way declare bankruptcy or enter into debt mitigation proceedings."
Reuters