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Iceland eases capital controls in place since 2008 crash

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Iceland eases capital controls in place since 2008 crash

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Iceland has taken its first steps towards lifting capital controls that have been in place since the country’s 2008 crash.

The government in Reykjavik said on Monday that it would impose a 39 percent tax on creditors who take assets reclaimed from its failed banks out of the country.

The aim of the measure is to prevent a sudden exodus of capital that could spell disaster for the currency, the Icelandic Krona, and cause damage to the economy as it recovers from the collapse of the banking sector seven years ago.

But creditors with billions of euros worth of assets frozen in three bankrupt lenders could begin legal proceedings against the country, risking years of action that would lock Iceland out of international markets.