Iceland's former PM to face charges over banking collapse

Geir Haarde could become the first head of state to be charged in connection with the global recessi

Iceland's former prime minister is to face charges for the country's banking and economic collapse following a parliament decision.

Geir Haarde could become the first head of state to be charged in connection with the global recession. He faces up to two years in prison if convicted.

The island's parliament voted to refer the charges to a special court, Landsdomur, by a narrow margin. The former finance minister, former foreign minister and former business minister were spared from penal action.

Landsdomur will decide whether Haarde should face charges for negligence.

A report prepared by a parliamentary committee said that Haarde should be held responsible for violations against the laws of ministerial responsibility and breaches against the nation's penal code.

Iceland's banks collapsed in October 2008. Investors in the banks' stocks saw their savings get wiped out while the nation's currency Krona was taken off from trading. Interest rates also sky-rocketed during the period.