Aggregated News From Investment Management Regulators

Iceland

Minutes of the Monetary Stability Committee 28 – 29 June

The minutes of the Financial Stability Committee meeting 28 - 29 June 2021 has been published. Committee members discussed financial stability developments and prospects, the economic situation, developments in the domestic financial markets, the position of and risk in the financial system and in the operations of individual financial institutions, default, the real estate market, stress tests, systemically important financial institutions, the financial cycle, the new Foreign Exchange Act, the Countercyclical capital buffer and restricions on consumer mortages. See the minutes here: Minutes of the Financial Stability Committee meeting, 28 - 29 June 2021 (8th meeting). Published 27 July 2021. See...

New Foreign Exchange Act and new Rules on Derivatives Trading

Parliament has recently passed a new Foreign Exchange Act, no. 70/2021, the bill of legislation for which was introduced this past February. The bill was prepared by a work group appointed by the Minister of Finance and Economic Affairs in September 2019. The group’s task was to conduct a comprehensive review of the regulatory framework for foreign exchange matters in Iceland, particularly the Foreign Exchange Act, the Act on the Treatment of Króna-Denominated Assets Subject to Special Restrictions (also called the Offshore Króna Act), and rules set on the basis of these acts. The new law entered into force...

Statement of the Financial Supervision Committee 30 June 2021

According to the Financial Supervision Committee’s statement of 13 January 2021, significant uncertainty about near-term economic developments lay ahead, and the Committee emphasised that financial institutions should demonstrate the utmost caution as regards their capital position. Financial institutions were instructed to have certain points as guideposts when deciding on dividend payments or share buybacks. Those instructions remain in effect through 30 September 2021. Furthermore, insurance companies were urged to observe the utmost caution in managing their equity, in view of the uncertainty. It now appears that the COVID-19 pandemic will affect financial institutions less than was feared at the beginning...

Statement of the Financial Stability Committee 30 June 2021

Accommodative monetary and macroprudential policies and measures taken by the Government have supported households and businesses during the pandemic. In recent months, there have been signs of a strong economic recovery, and asset prices have risen materially. The three large banks are in a strong position, their capital and liquidity are well above regulatory minimal, and they have ready access to liquidity in both krónur and foreign currencies. As a result, they are highly resilient. At its meeting, the Financial Stability Committee (FSN) decided to set special rules on derivatives trading on the basis of the new Foreign Exchange Act. The...

Rules on Credit Institutions’ Minimum Net Stable Funding Ratio

The Central Bank of Iceland’s Rules on Credit Institutions’ Minimum Net Stable Funding Ratio, no. 750/2021, took effect today. The Rules introduce a 100% overall stable funding ratio. At the same time, the Rules on Funding Ratios in Foreign Currencies, no. 1032/2014, were repealed. With amendments to the Regulation on Prudential Requirements for Credit Institutions, no. 233/2017, contained in Rules no. 749/2021, which also took effect today, Regulation (EU) 2019/876 of the European Parliament and of the Council (CRR II) has been implemented. Among other things, CRR II introduces binding minimum net stable funding ratios for credit institutions. In accordance...

Working Paper no. 86: The currency that came in from the cold: Capital controls and the information content of order flow

The Central Bank of Iceland has published a research paper analysing how capital controls affect the microstructure of foreign exchange markets, using as a case study the introduction and subsequent removal of capital controls in Iceland. The impact and information content of trades is analysed in a trivariate VAR model of private dealer order flow, Central Bank order flow and the EURISK exchange rate that allows for contemporaneous feedback effects. The results suggest profound effects of capital controls on the FX market microstructure. When capital controls were introduced, volume plummeted, the information content of trading activity declined and became...

Special Publication no. 15: Capital requirements and financial stability

The Central Bank of Iceland has published a report on capital requirements and financial stability. The publication contains an accessible summary of the capital requirements in effect in Iceland, in view of the global regulatory framework and its evolution in recent decades. The report also presents the rationale for different capital requirements and their application abroad as well as in Iceland, as well as giving an overview of key economic issues relating to the requirements. Because of the uniquely important social role that financial institutions have – deposit taking institutions in particular – it is extremely important for the economy...

IMF Executive Board completes Article IV Consultation on Iceland

The Executive Board of the International Monetary Fund completed its Article IV Consultation on the status and outlook for the Icelandic economy on Friday June 4. The IMF holds similar consultations with member countries every one to two years on the basis of Article IV of the Articles of Agreement of the IMF. An IMF mission conducted virtual meetings with the Icelandic authorities and various stakeholders in March and April. The Fund‘s latest reports on Iceland were published today on its website (see links below). Iceland: 2021 Article IV Consultation-Press Release; Staff Report; Staff Statement; and Statement by the Executive...

Minutes of the Monetary Policy Committee meeting of 17-18 May 2021

In accordance with the Monetary Policy Committee Rules of Procedure, the minutes of the Committee's most recent meeting have been published on the Bank's website. The minutes are published two weeks after the announcement of the Committee‘s decision. Accordingly, we have now published the minutes from the meeting of 17-18 May 2021, during which the Committee discussed economic and financial market developments, decisions on the application of the Bank’s monetary policy instruments, and the communication of those decisions on 19 May. The minutes can be found here: Minutes of the Central Bank of Iceland Monetary Policy Committee meeting 17-18 May 2021...

Interest on Central Bank of Iceland certificate of deposit CBI2016

With reference to Article 10, Paragraph 2 of the Act on the Treatment of Króna-Denominated Assets Subject to Special Restrictions, no. 37/2016, interest rates on the certificates of deposit specified in the Act are reviewed by the Central Bank on interest payment dates. The Central Bank has decided that as of the interest payment date 2 June 2021, the annual interest rate on certificates of deposit in the series CBI2016 (ISIN: IS0000027068) shall remain unchanged at 0%. See here pdf-file with the formal decision enclosed. This news item was originally published by the Central Bank of Iceland (CB IS). For more information,...

Minutes of the Financial Stability Committee meeting 12-13 April

The minutes of the Financial Stability Committee meeting 12-13 April 2021 has been published.  Committee members discussed financial stability developments and prospects, the economic situation, developments in the domestic financial markets, the position of and risk in the financial system and in the operations of individual financial institutions, default, the real estate market, stress tests, systemically important financial institutions, the financial cycle, and the tasks of the resolution authority. See the minutes here: Minutes of the Financial Stability Committee meeting, 12 - 13 April 2021 (7th meeting). The photo is of the Committee with its secretary. See further information here. This news...

Current account deficit 27.1 b.kr. in Q1/2021 – net IIP positive by 36, 2% of GDP

The current account showed a deficit of 27.1 b.kr. in Q1/2021. That represents a deterioration of 50.4 b.kr from the preceding quarter and of 38.8 b.kr. from to the same quarter of 2020. The deficit on goods trade totalled 21.9 b.kr., and the deficit on services trade totalled 10.9 b.kr. There was a 12.8 b.kr. surplus on primary income and a 7.1 b.kr. deficit on secondary income. See here the press release no. 15/2021 with tables: Current account deficit 27.1 b.kr. in Q1/2021 – net IIP positive by 36,2% of GDP This news item was originally published by the Central Bank of...

Regulator Information

Regulator Name: Central Bank of Iceland
Abbreviation: CB IS
Jurisdiction: Iceland
Abbreviation: FME IS
Jurisdiction: Iceland

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