FACTBOX: Governments struggle with financial crisis

(Reuters) - Iceland took over its second largest bank on Tuesday and Russia announced an aid package for banks, seeking to limit damage from the global financial crisis.

Following are measures taken by national governments around the world on Tuesday:

ICELAND

Iceland used emergency powers adopted on Monday to dismiss the board of directors of Landsbanki, the island's second largest bank by value, and put the bank in receivership, a minister told state radio.

Battling to stave off national bankruptcy, Iceland also said Russia had agreed to provide it with a 4 billion euro loan. But Russia's deputy finance minister said no decision had been made.

The central bank said it was pegging the crown to a basket of currencies at a level of 131 crown per euro, saying the move was taken to make its interbank market function. The crown has been in freefall for days as a result of a crisis in the financial system.

Iceland has already part-nationalized its number-three bank Glitnir and passed new legislation to give the government sweeping powers over the banking sector.

BRITAIN

The British government held talks with major banks on Monday evening at which the possibility of an injection of public money was discussed, according to a source familiar with the talks.

Shares in some of Britain's biggest high street banks tumbled on news of the talks. Media reports said Royal Bank of Scotland, Lloyds TSB and Barclays were seeking 15 billion pounds ($26 billion) each.

The UK Treasury declined to comment, but said it would do whatever was necessary to maintain stability.

RUSSIA

Russia will lend 950 billion rubles ($37 billion) in subordinated loans to key banks, President Dmitry Medvedev said after meeting bankers to discuss what he called a "large scale financial crisis".

Medvedev said the money could be split, with lending giant Sberbank getting up to 500 billion rubles, another state-owned banking major VTB receiving 200 billion rubles, and the rest split between smaller players.

The comments boosted Russian bourses, with the MICEX index adding 5.5 percent and RTS up 4 percent. The index lost 18 percent on Monday.

EUROPEAN UNION