The governor of Iceland's central bank has defended his controversial role in the collapse of the country's banking system, saying he repeatedly warned the heads of the banks that they were in danger but was ignored.

David Oddsson, prime minister between 1991 and 1999 and father of the liberal politics that revolutionised the economy, has fallen from grace in the aftermath of the crisis. There have been demonstrations calling for his resignation, where protesters chanted "David out!" and sang the socialist anthem "The Internationale" outside his office in Reykjavik.