Central Bank of Iceland
As of 1 January 2020, the Central Bank is responsible for the tasks entrusted by law and Governmental directives to the Financial Supervisory Authority, and the financial supervision is now part of the Central Bank. The Bank shall therefore monitor supervised entities to ensure that their activities are in compliance with the law and with Governmental directives, and that they are in other respects consistent with sound and appropriate business practices.
With the approval of the Minister, the Central Bank may declare a quantitative target for inflation. The target is currently, from 2001, defined as a twelve-month inflation rate of 2½%. The Central Bank is authorised, with the approval of the Minister, to declare a target for the exchange rate of the Icelandic króna versus foreign currencies. The Central Bank is required to promote the implementation of the Government’s economic policy as long as it does not consider this inconsistent with the Bank’s objectives.
Decisions on the application of the Central Bank's monetary policy instruments shall be taken by the Monetary Policy Committee. Decisions by the Monetary Policy Committee must be based on the Bank's price stability objective and a thorough assessment of the economic situation and outlook.More
Decisions on the application of the Central Bank’s financial stability policy instruments shall be taken by the Financial Stability Committee. Decisions taken by the Financial Stability Committee must be based on the law and on a thorough assessment of the current situation of and outlook for the financial systemMore
The Central Bank collaborates in a number of ways with a large number of foreign financial institutions, including other central banks, not least in the Nordic region. It also engages in regular cooperation with the European Central Bank and the Organisation for Economic Co-operation and Development (OECD) and is a shareholder in the Bank for International Settlements (BIS) in Basel, Switzerland. The Central Bank represents Iceland at the International Monetary Fund (IMF).More