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 essential to stability, growth, and effective monetary policy. Twice a year the department conducts an in-depth appraisal of the macroeconomic environment, financial markets, and financial institutions and publishes its findings 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

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Macroprudential policy

Macroprudential policy is comprehensive or system-wide supervision that entails overseeing the financial system as a whole, the interactions between the units it comprises, and the connections between the financial system and other parts of the economy.  

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Infrastructures

 Within the Financial Market Infrastructure Department are three units: Real-Time Gross Settlement (RTGS) System Operation, Oversight of Systemically Important Financial Market Infrastructure, and Issuance of Banknotes and Coin.

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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.

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