Iceland's largest bank, Kaupthing, has become the third financial institution to be taken over by the country's government in the past week.
The country's Financial Supervisory Authority said the move was made to safeguard its domestic banking system.
All domestic deposits at the bank were fully guaranteed, it added.
On Wednesday, the UK Treasury arranged for ING Direct to take over the Ј2.5bn of deposits of 160,000 UK customers of Kaupthing's online arm, Kaupthing Edge.
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The Swedish central bank had already agreed to provide a loan to the bank's Swedish arm.
The action by Iceland's financial regulator means control has now been seized of all three of the nation's major banks. Landsbanki and Glitnir were taken over earlier this week.
The country has struggled to cope with the global financial crisis.
"The action taken... was a necessary first step in achieving the objectives of the Icelandic government and parliament to ensure the continued orderly operation of domestic banking and the safety of domestic deposits," Iceland's Financial Supervisory Authority said.
(BBC)
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