Financial Stability

One of the Central Bank of Iceland’s main tasks is to promote a safe, stable, and effective financial system. Financial stability means that the financial system is equipped to withstand shocks to the economy and financial markets, ensure the availability of capital, mediate credit and payments, and redistribute risks appropriately. A healthy financial system is a prerequisite for stability, output growth, and effective monetary policy. Twice a year the Bank’s Financial Stability Department conducts an in-depth appraisal of the macroeconomic environment, financial markets, financial institutions, and payment systems. The results are published in the Bank’s Financial Stability report.

Financial Stability Committee

Decisions on the application of the Central Bank’s financial stability policy instruments, shall be taken by the Financial Stability Committee


Macroprudential policy

Macroprudential policy centres on safeguarding the stability of the financial system as a whole by limiting the accumulation of systemic risk.


Financial market infrastructure oversight

The Bank’s oversight of financial infrastructure is aimed at promoting security, efficiency, and efficacy of core infrastructure in the Icelandic financial system. The term core infrastructure, or systemically important financial market infrastructure, refers to infrastructure that could catalyse and/or spread system-wide disruption of, for instance, payment or securities settlement systems.


Foreign exchange

 Foreign exchange transactions have been subject to restrictions ever since the banking system collapsed in the autumn of 2008.With Rules which took effect on 14 March 2017 most restrictions on foreign exchange transactions and cross-border movement of domestic and foreign currency were lifted.