I remember some chatter in an IRC channel I frequent, and sure enough Google News turned up a bunch of articles.

The first article I clicked on was: http://afp.google.com/article/ALeqM5grJZjERBW9I7J3I0Wnb6bCxu...

Iceland seeks aid from ECB, Fed; hikes interest rate to 18 pct

13 hours ago

REYKJAVIK (AFP) — Iceland jacked up its key interest rate to 18 percent and said it was seeking help from the European Central Bank and the US Federal Reserve in twin moves Tuesday to stave off national bankruptcy.

article continues at the link I posted above.

So while they may have a high interest rate, it looks like they may also have a high risk.