Financial Stability Committee
Decisions on the application of the Central Bank’s financial stability policy instruments, shall be taken by the Financial Stability Committee according to Act No. 92/2019 on the Central Bank of Iceland. Decisions taken by the Financial Stability Committee must be based on a thorough assessment of the current situation of and outlook for the financial system.
The Financial Stability Committee shall comprise the Governor, 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 Minister may only appoint the same person to the Financial Stability Committee twice. The Governor shall chair the Financial Stability Committee, and the Deputy Governor for Financial Stability shall be vice-chair.
Tasks of the Financial Stability Committee
The tasks of the Financial Stability Committee are to:
- Assess the current situation of and outlook for the financial system, systemic risk, and financial stability.
- 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.
- Approve Governmental directives and take the decisions entrusted to the Committee by law.
- Decide which supervised entities, infrastructure, and markets shall be considered systemically important and of a nature that their activities could affect financial stability.
Meetings of the Financial Stability Committee
Meetings of the Financial Stability Committee shall be deemed to have a quorum if five of its seven members are in attendance. Decisions by the Financial Stability Committee shall be taken by a simple majority of votes; in the case of a tie, the Chairman shall cast the deciding vote.
The Financial Stability Committee shall meet at least four times a year. In addition, the Financial Stability Committee may meet if its Chairman or three members of the Committee so request. The Financial Stability Committee shall adopt rules of procedure concerning the preparation of, rationale for, and presentation of its decisions. The Financial Stability Committee shall maintain a record of minutes of its meetings. The Financial Stability Committee’s decisions on the application of financial stability policy instruments shall be published and an account given of the rationale for the decisions, together with an assessment of the situation, and minutes on the topic shall be published unless such publication can be expected to have an adverse impact on financial stability. Minutes and data prepared for or handled by the Financial Stability Committee are exempt from the provisions of the Access to Information Act and the Administrative Procedures Act concerning
access to information.
The Financial Stability Committee shall report to Parliament on its work once a year. The
contents of the report shall be discussed in the Parliamentary committee of the Speaker’s choosing.