High Profile Former Iceland Bank CEO Arrested

Icelandic authorities have arrested the former chief executive of collapsed bank Kaupthing - the first high profile arrest in the wake of the tiny Nordic country's financial collapse.

Hreidar Mar Sigurdsson was detained on Thursday by the special prosecutor tasked with investigating the Icelandic banking crash in October 2008.

The prosecutor's office says Sigurdsson is suspected of falsifying documents and breaking laws on stock trading for personal gain.

The former banker is being held in police custody until a hearing scheduled to take place Friday at the Reykjavik District Court to decide whether he will be granted bail.

The global financial crisis washed up hard on the shores of the volcanic island of 320,000 people. After racking up massive debts during years of laissez-faire economic regulation and rapid expansion, Iceland's three main banks collapsed within the space of a week in October 2008.