Reykjavik  - Icelandic banking group Straumur-Burdaras on Monday became the fourth major bank to be taken over by the Icelandic government since October 2008 due to a lack of liquidity.

The Icelandic Financial Supervisory Authority (FSA) announced the decision the day after Straumur said it had obligations of 33 million euros (41 million dollars), but only had disposable funds of 15.3 million euros.

In interim committee was to lead the bank and chief executive William Fall has tendered his resignation, the agency said.

In October 2008, Icelandic banking groups Glitnir, Landsbanki and Kaupthing were all nationalized under an emergency law pushed through by the former government and opposition parties to reorganize the country's stricken financial system.

The commercial banks had racked up liabilities some 10 times larger than Iceland's economy and were severely hit by the global credit crunch.

Iceland and its some 320,000 inhabitants are struggling with interest rates of 18 per cent, high inflation and rising unemployment.

The nation's economy is predicted to contract by some 10 per cent this year.

In the wake of the economic meltdown, public protests forced the collapse of the government in January and an interim government is running the country until early elections April 25.

Trading in Straumur-Burdaras shares was earlier Monday halted on Nordic bourses in Stockholm, Copenhagen and Helsinki.

The group in February reported a loss of 699 million euros after tax for the full-year 2008. (dpa)