(The Wall Street Journal) -- With confidence in world credit markets at a low ebb, banks are taking a battering from shareholders, debt investors and ratings firms over exposure to poor-quality US mortgages and other hard-to-value derivatives.

But just as it appears to be the worst time to be buying -- or selling -- a bank, Iceland's Kaupthing Bank yesterday agreed to buy Dutch rival NIBC for €3bn ($4.06bn) in stock and cash from a consortium led by private equity firm JC Flowers.