As share trading in six of Iceland's biggest financial firms was temporarily halted, BBC News has spoken to people in Iceland.
They have been relating their experiences of the current economic climate.
PERI DESAI, REYKJAVIK
I am originally from Bombay and my husband is from Iceland. After living in London for a while we decided that we would get a better standard living if we moved to Iceland, which we did four years ago.
In recent months, the financial crisis has deteriorated.
I am concerned about what the government will actually do rather than what it says. It needs to build more faith with people and reassure them the situation will improve.
It is like being in a war situation at supermarkets. When I go shopping, I notice people are stockpiling food.
Supermarkets say they don't know if they can sell much produce because they don't have the money to pay for imported goods so shoppers are being cautious.
I have savings at one of the major banks but at the moment I'm keeping my money there and hoping for the best. Others have taken their money out but because all the banks are vulnerable, there is no choice in where you put your savings.
Unemployment has steadily risen. I lost my job in June but I've been lucky to find another one.
Someone I know lost their job in April and is still looking for work despite holding a Masters degree in engineering.
I bought my house for 13million krona four years ago but now I owe 16million krona, so I have gone into negative equity.
There has been talk that Iceland will join the EU. I desperately would like to see this happen.
I am afraid that if Iceland doesn't join, the country will suffer because the krona is worth so little now.
TEDDI HUNFJORD, REYKJAVIK
I bank with Glitnir and I wasn't able to get access to my account for a couple of days.
No one knows what's happening here. Many people are at their computers checking news and finance websites for more information.
I wasn't reassured by the prime minister's speech
I work for a service department at a computer company. Last month the number of staff had been cut by half and now we are under twice as much pressure.
My salary is so low. Because trade unions are not negotiating pay rises, it is unlikely my salary will increase.
The prime minister has been on television but I wasn't reassured by his speech. I think he should have acted about eight months before when the problems first begun.
Many people want the finance minister to resign because of the way the situation has been badly handled.
My wife and I have lived in London and Holland, and last year we decided to return to Iceland. I think that if things get any worse, we may think about moving back to London.
DANNY AUSTIN, GARDABAER
I am British and I have lived here for 15 months and I have taken a great interest in the economy.
I was planning to visit England for a couple of weeks before Christmas, but I don't think I will be able to afford it.
Buying British currency is becoming very expensive. Last year, a pound was worth 130 krona. Now it is 205 and it may even reach 300 krona.
I currently work for a local council but I am seriously considering working as a fisherman. The pay can be as much as £10,000 a month. But competition may even lead to these jobs becoming scarce.
Many Icelanders have underestimated the situation. I am interested in the economy and I asked my friends what will happen if the banks fail. This seemed to be like an alien concept to them.
The general fear is of the complete collapse of the two major banks Kaupthing and Landsbanki.
There has been a loss of faith in the prime minister who had said the crisis would soon pass. Now he says the situation will not improve until 2011.
ALEX ELLIOTT, REYKJAVIK
There has been pressure on the economy all year, but in the last couple weeks I have seen a big change.
The currency rate has fallen and there has been a knock-on effect on many businesses.
A year ago the euro wasn't particularly popular, but many more people are attracted to the idea.
The government wants banks and pension funds to draw up assets to help the economy. Trade Unions are backing the government by not insisting on huge wage demands.
Prices in fresh produce and speciality goods have gone up, and I have even heard of panic buying of olive oil!
But I don't think it is all doom and gloom. I haven't got a mortgage and I only have a current account so I know I am better off than most.
There is a lot of money around. If the government, banks, pension funds, and the trades union can pull together in the same direction, I think the economy will turn around.
I have cut down on luxury items such as clothing and dining out. On a day-to-day basis there is nothing anyone can do other than to spend a little less.