News today that Iclandic Bank Baugur had applied for bankruptcy protection has sent shockwaves through major retailers in the UK.

Baugur holds stakes in household names like House of Fraser and the toy shop Hamleys, so this revelation is rattling an industry already hard hit by falling revenues.

Iceland's financial meltdown has already seen the resignation of the country's Prime Minister and the nationalisation of its three biggest banks, but still the bad news continues.

The idea that a country could go bankrupt would have seemed fanciful not that long ago, but the fact that it has come to pass should give pause to ailing economies everywhere. Just the other day I heard an analyst on the radio seriously floating the suggestion that the UK could become bankrupt. Others have said that they would be extremely hesitant to invest there beacuse of the difficulties the country is still facing.

So do you think that Iceland's fall was a result of very specific conditions that are unlikely to be repeated anywhere else, or is nowhere safe? The last few years have forced us to change many of our ideas as to what can happen in the world economy, but is this a step too far?