Reykjavik  - The Icelandic Financial Supervisory Authority on Monday said was temporarily suspending trading of shares and other "financial instruments" issued by several banks including Glitnir bank, Kaupthing bank and Landsbanki.

A week ago, the government of Iceland bought a majority stake in Glitnir bank.

The government paid 600 million euros (877 million dollars) for a 75-per-cent stake in Glitnir, saying the move was aimed at strengthening Glitnir's capital ratio and liquidity.

The trading halt Monday was linked to a possible announcement of further government intervention.

The Icelandic currency, which came under attack from speculators earlier this year, has dropped in value compared to the euro and the dollar, with the country suffering from some 15 per cent inflation. (dpa)