Organisation

The Governor of the Central Bank directs and is responsible for the Bank's operations and is authorised to take decisions on all matters not entrusted to others by law.

Decisions on applying the Central Bank's monetary policy instruments shall be taken by the Monetary Policy Committee. Decisions on the application of the Central Bank’s financial stability policy instruments shall be taken by the Financial Stability Committee. Decisions entrusted to the Financial Supervisory Authority by law or Governmental directives fall under the remit of the Financial Supervision Committee.

Decisions on managing the international reserves and granting guarantees or loans to credit undertakings experiencing liquidity problems shall be taken by the Governor and Deputy Governors at a meeting called by the Governor. Decisions on setting rules on special reserve requirements for new foreign currency inflows on the basis of the Foreign Exchange Act, decisions on setting rules on the operation of regulated foreign exchange markets, and decisions on organisation and the setting of rules on the Bank’s activities shall be taken in the same manner.  

The Supervisory Board monitors the Bank’s compliance with the statutory provisions applying to its activities.  

 The Minister appoints the Governor for a term of five years.  The Minister also appoints three Deputy Governors for a term of five years. One Deputy Governor directs matters relating to monetary policy; the second, matters relating to financial stability; and the third, matters relating to financial supervision. 

Governor

Ásgeir Jónsson, Governor as of 20 August 2019. 

  

Deputy Governors as of 1 January 2020:

Gunnar Jakobsson, Deputy Governor for Financial Stability 
Rannveig Sigurdardóttir, Deputy Governor for Monetary Policy
Unnur Gunnarsdóttir, Deputy Governor for Financial Supervision

 

Central Bank of Iceland - organisational chart

 

Monetary Policy Committee

Decisions on the application of the Central Bank's monetary policy instruments are 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.

Members of the Monetary Policy Committee are the Governor, the Deputy Governor for Monetary Policy, the Deputy Governor for Financial Stability, and two experts in the fields of economics and monetary policy who are appointed by the Minister for a term of five years. The Governor chairs the Monetary Policy Committee, and the Deputy Governor for Monetary Policy serves as vice-chair.

The Monetary Policy Committee takes decisions on interest rates pursuant to Article 22 of the Central Bank Act, in order to enforce the Bank’s monetary policy. The Committee also takes decisions on transactions with credit undertakings other than those specified in Article 19, Paragraph 2 of the Act. Furthermore, the Committee takes decisions on minimum reserve requirements, foreign exchange market transactions, and securities transactions undertaken with the aim of achieving the Bank’s price stability objectives. 

Monetary Policy Committee Rules of Procedure

 

Financial Stability Committee

Decisions on the application of the Central Bank’s financial stability policy instruments are 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 system.  In the Committee’s work, the Central Bank shall cooperate with other Governmental authorities, including the Ministry entrusted with matters relating to financial stability.

Members of the Financial Stability Committee are the Governor, the Deputy Governors, and three experts in financial market affairs or economics who shall be appointed by the Minister responsible for financial stability for a term of five years. The Permanent Secretary or an appointed official from the Ministry responsible for financial stability shall also participate in Committee meetings as a non-voting member with the right to address the meeting and present proposals. The composition of the Financial Stability Committee shall be such that the Committee collectively possesses sufficient expertise, qualifications, and experience to carry out the tasks entrusted to it. The Governor chairs the Financial Stability Committee, and the Deputy Governor for Financial Stability serves as vice-chair.

 The tasks of the Financial Stability Committee are to:

  1. Assess the current situation of and outlook for the financial system, systemic risk, and financial stability. 
  2. Discuss and define the actions deemed necessary at any given time in order to affect the financial system so as to strengthen and preserve financial stability, and to this end, direct comments to the appropriate Governmental authorities when warranted.
  3. Approve Governmental directives and take the decisions entrusted to the Committee by law.
  4. Decide which supervised entities, infrastructure, and markets shall be considered systemically important and of such a nature that their activities could affect financial stability.

Financial Supervision Committee

The Financial Supervision committee shall take decisions entrusted to the Financial Supervisory Authority by law or Governmental directives. The Committee is authorised to entrust the Deputy Governor for Financial Supervision with taking non-major decisions.

Members of the Financial Supervision Committee are the Deputy Governor for Financial Supervision, the Deputy Governor for Financial Stability, and three experts in financial market affairs who shall be appointed by the Minister responsible for the financial market for a term of five years. The composition of the Financial Supervision Committee shall be such that the Committee collectively possesses sufficient expertise, qualifications, and experience to carry out the tasks entrusted to it. The Deputy Governor for Financial Supervision chairs the Financial Supervision Committee, and the Deputy Governor for Financial Stability serves as vice-chair. When decisions are taken on the adoption of rules of procedure and on entrusting the Deputy Governor for Financial Supervision with taking non-major decisions and decisions concerning systemically important financial institutions’ equity, liquidity, and funding, the Governor takes a seat on the Financial Supervision Committee as chair, and the Deputy Governor for Financial Supervision serves as vice-chair.

Financial Supervision Committee Rules of Procedure

 

 Supervisory Board

The Supervisory Board of the Central Bank shall be elected following Parliamentary elections. The Board comprises seven representatives and an equal number of alternates who are elected by proportional vote in Parliament.

The mandate of the Supervisory Board remains in place until a new Board is elected.  If a principal member of the Supervisory Board vacates the position, an alternate shall assume this seat until Parliament has elected a new principal member for the remainder of the term of the Supervisory Board.

The Supervisory Board selects a chair and vice-chair from among its members.

The Governor attends meetings of the Supervisory Board, with the right to address the meeting, make proposals, and participate in discussions. The Governor shall leave the meeting, however, if the Supervisory Board so decides.

The Internal Auditor is entitled to attend Supervisory Board meetings and shall inform the Board regularly about his/her work.

The Supervisory Board monitors the Bank’s compliance with the statutory provisions applying to its activities.  Monitoring by the Supervisory Board does not include case handling or decisions on specific matters, however. In other respects, the Supervisory Board’s tasks are as follows:

  1. To endorse proposals by the Governor and Deputy Governors concerning the organisation of the Bank.
  2. To determine remuneration and terms of employment for members of the Monetary Policy Committee, Financial Stability Committee, and Financial Supervision Committee.
  3. To endorse the rules of procedure for the Monetary Policy Committee, Financial Stability Committee, and Financial Supervision Committee. 
  4. To oversee the Bank’s internal auditing and appoint the Internal Auditor.
  5. To endorse wage agreements with Bank employees, consider rules on their pension fund, and endorse the appointment of the Bank’s representative on the board of the pension fund when called for.
  6. To endorse the Central Bank’s proposal to the Minister on the rules for the Bank’s accounting and annual accounts.
  7. To endorse the Bank’s annual accounts.
  8. To endorse the Bank’s decision on capital adequacy criteria and disposition of profit.
  9. To endorse the Bank’s operating budget as presented by the Governor at the beginning of each operational year.
  10. To monitor the Bank’s assets and operations and endorse decisions on major investments in housing and other facilities for its activities.
  11. To endorse the Bank’s tariff.

The Supervisory Board shall be furnished with such information on the Central Bank of Iceland and companies owned by the Bank as is necessary for it to carry out its legally mandated role. The Governor shall inform the Supervisory Board of the main aspects of the Bank’s policy and of the rules it sets. 

On 18 April 2018, seven principal members and an equal number of alternates were elected by Parliament to the Supervisory Board of the Central Bank of Iceland. At its first meeting, held on 25 April 2018, the newly elected Supervisory Board allocated tasks among its members.

Principal members:
Gylfi Magnússon, chair
Thórunn Gudmundsdóttir, vice-chair
Bolli Hédinsson
Una María Óskarsdóttir
Sigurður Kári Kristjánsson
Jacqueline Clare Mallett
Frosti Sigurjónsson

Alternates:
Thórlindur Kjartansson
 Jóhanna Vigdís Gudmundsdóttir
 Hildur Traustadóttir
 Valgerdur Sveinsdóttir
 Kristín Thoroddsen
 Ólafur Margeirsson
 Bára Ármannsdóttir

 

Supervisory Board

The Supervisory Board, 18 April 2018. Seated, from left: Sigurdur Kári Kristjánsson, Gylfi Magnússon (Chairman), Thórunn Gudmundsdóttir. Standing, from left: Una María Óskarsdóttir, Frosti Sigurjónsson, Bolli Hédinsson and Jacqueline Clare Mallett.