22 February 2024

Statement of the Central Bank of Iceland Financial Stability Committee 22 February 2024

The Financial Stability Committee

In view of the extraordinary circumstances in Grindavík resulting from volcanic activity in the area, the Financial Stability Committee (FSN) of the Central Bank of Iceland has decided to temporarily ease borrower-based measures for those individuals who owned residential property in Grindavík on 10 November 2023. The maximum ratio of debt service to disposable income will be 40% and the maximum loan-to-value ratio will be 85% for these individuals when they next purchase residential housing.

The FSN is of the opinion that this exemption is unlikely to have a material impact on lenders’ resilience and will therefore not significantly affect financial stability.

Press release no. 3/2024
22 February 2024