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List of Banks in Iceland
The Central Bank of
Iceland (Icelandic: Seðlabanki Íslands) is the central bank or reserve
bank of Iceland. It has served in this capacity since 1961, when it was
created by an act of the Alþingi out of the central banking department
of Landsbanki Íslands, which had had the sole right of note issuance
since 1927 and had conducted only limited monetary policy.
Seðlabanki Íslands is owned by the Icelandic government, administered by
a three-member board of governors appointed by the Prime Minister to
seven-year terms and a seven-member supervisory board. It has the sole
right to issue notes and coins of Icelandic krónur and to manage the
state's foreign currency reserves. The Central Bank Act of 1986
eliminated the ability of the Central Bank to regulate the interest
rates of commercial banks and savings banks.
Though nominally independent, the Central Bank of Iceland was
historically expected to follow the lead of the central government. In
2001, however, a floating exchange rates policy was introduced and since
then the Central Bank has been empowered to adopt an inflation target
and manage monetary policy so as to achieve price stability independent
of the policies of the central government.
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Contemporary banks
Central
■Central Bank of Iceland
Commercial
■NBI (government-owned, has taken over the Icelandic
operations of Landsbanki)
■Íslandsbanki (government-owned, has taken over the
Icelandic operations of Glitnir and Nýi Glitnir)
■Nýja Kaupþing (government-owned, has taken over the
Icelandic operations of Kaupthing Bank)
■Sparisjóðabanki (government-owned, known as Icebank until
October 2008, acted as a clearing bank for the savings banks,
who were its shareholders)
■MP Investment Bank (also investment)
Investment
■MP Investment Bank (also commercial)
■Straumur–Burðarás Investment Bank (government-owned)
■Saga Investment Bank
Savings
■Byr sparisjóður
■nb.is-sparisjóður hf.
■Sparisjóður Bolungarvíkur
■Sparisjóður Höfðhverfinga
■Sparisjóður Kaupþings hf.
■Sparisjóður Mýrasýslu
■Sparisjóður Norðfjarðar
■Sparisjóður Ólafsfjarðar
■Sparisjóður Reykjavíkur og nágrennis hf. (government-owned,
often abbreviated to SPRON)
■Sparisjóður Siglufjarðar
■Sparisjóður Strandamanna
■Sparisjóður Suður-Þingeyinga
■Sparisjóður Svarfdæla
■Sparisjóður Vestmannaeyja
■Sparisjóður Þórshafnar og nágrennis
■Sparisjóðurinn í Keflavík
Defunct banks
■Nýi Glitnir (previously government-owned)
■Landsbanki (previously government-owned, privatized, went
back into government hands during the 2008 Icelandic
financial crisis)
■Glitnir (previously government-owned, privatized, went back
into government hands during the 2008 Icelandic financial
crisis)
■Kaupthing Bank (previously government-owned, privatized,
went back into government hands during the 2008 Icelandic
financial crisis)
■Búnaðarbanki (merged with Kaupthing, became KB Bank and
later Kaupthing Bank)
■Íslandsbanki (First Íslandsbanki was founded in 1904, went
bankrupt during the Great Depression. Second Íslandsbanki
came into existence when the government owned banks
Útvegsbanki, Samvinnubanki, Iðnaðarbanki and Verslunarbanki
merged. Íslandsbanki was later re-branded as Glitnir Bank,
which was taken into government administration late 2008.
The third Íslandsbanki will emerge on 20. February 2009 when
the government-owned Glitnir Bank is set to be re-branded as
Íslandsbanki)
■Útvegsbanki (merged with Iðnaðarbanki, Alþýðubanki,
Verzlunarbanki and Samvinnubanki)
■Samvinnubanki (merged with Iðnaðarbanki, Alþýðubanki,
Verzlunarbanki and Útvegsbanki)
■Iðnaðarbanki (merged with Útvegsbanki, Alþýðubanki,
Verzlunarbanki and Samvinnubanki)
■Verzlunarbanki (merged with Útvegsbanki, Alþýðubanki,
Iðnaðarbanki and Samvinnubanki) |
In 2007, Iceland was the
seventh most productive country in the world per capita (US$54,858), and
the fifth most productive by GDP at purchasing power parity ($40,112).
Except for its abundant hydroelectric and geothermal power, Iceland
lacks natural resources; historically its economy depended heavily on
fishing, which still provides 40% of export earnings and employs 7% of
the work force. The economy is vulnerable to declining fish stocks
and drops in world prices for its main material exports: fish and fish
products, aluminium, and ferrosilicon. Whaling in Iceland has been
historically significant. Iceland still relies heavily on fishing, but
its importance is diminishing from an export share of 90% in the 1960s
to 40% in 2006.[64]
While Iceland is a highly developed country, until the 20th century it
was among the poorest countries in Western Europe. However, strong
economic growth has led Iceland to be ranked first in the United Nations'
Human Development Index report for 2007/2008, and the 14th longest-living
nation with a life expectancy at birth of 80.67 years. Many political
parties remain opposed to EU membership, primarily due to Icelanders'
concern about losing control over their natural resources.
A 500 króna banknote. The Icelandic króna is the national currency of
Iceland.The national currency of Iceland is the Icelandic króna (ISK). A
poll, released on 5 March 2010, by Capacent Gallup showed that 31% of
respondents were in favour of adopting the euro and 69% opposed.[65]
Iceland's economy has been diversifying into manufacturing and service
industries in the last decade, including software production,
biotechnology, and financial services. Despite the decision to resume
commercial whale hunting in 2006, the tourism sector is expanding, with
the recent trends in ecotourism and whale-watching. Iceland's
agriculture industry consists mainly of potatoes, green vegetables (in
greenhouses), mutton and dairy products.[66] The financial centre is
Borgartún in Reykjavík, hosting a large number of companies and three
investment banks. Iceland's stock market, the Iceland Stock Exchange
(ISE), was established in 1985.[67]
Iceland ranked 5th in the Index of Economic Freedom 2006 and 14th in
2008. Iceland has a flat tax system. The main personal income tax rate
is a flat 22.75% and combined with municipal taxes the total tax rate is
not more than 35.72%, and there are many deductions.[68] The corporate
tax rate is a flat 18%, one of the lowest in the world.[68] Other taxes
include a value-added tax; a net wealth tax was eliminated in 2006.
Employment regulations are relatively flexible. Property rights are
strong and Iceland is one of the few countries where they are applied to
fishery management.[68] Taxpayers pay various subsidies to each other,
similar to European countries with welfare state, but the spending is
less than in most European countries.
Despite low tax rates, overall taxation and consumption is still much
higher than countries such as Ireland. According to
OECD, agricultural support is the highest among OECD countries and an
impediment to structural change. Also, health care and education
spending have relatively poor return by OECD measures. OECD Economic
survey of Iceland 2008 highlighted Iceland's challenges in currency and
macroeconomic policy.[69] There was a currency crisis that started in
the spring of 2008, and on 6 October trading in Iceland's banks was
suspended as the government battled to save the economy.[70]
Economic ContractionMain article: 2008–2011 Icelandic financial crisis
Iceland has been hit especially hard by the ongoing late 2000s recession,
because of the failure of its banking system and a subsequent economic
crisis. Before the crash of the three largest banks in Iceland, Glitnir,
Landsbanki and Kaupthing, their combined debt exceeded approximately six
times the nation's gross domestic product of €14 billion ($19 billion).[71][72]
In October 2008, the Icelandic parliament passed emergency legislation
to minimise the impact of the financial crisis. The Financial
Supervisory Authority of Iceland used permission granted by the
emergency legislation to take over the domestic operations of the three
largest banks.[73] Icelandic officials, including central bank governor
Davíð Oddsson, stated that the state did not intend to take over any of
the banks' foreign debts or assets. Instead, new banks were established
around the domestic operations of the banks, and the old banks will be
run into bankruptcy.
On 28 October 2008, the Icelandic government raised interest rates to
18%, (as of August 2010, it was 7%) a move which was forced in part by
the terms of acquiring a loan from the IMF. After the rate hike, trading
on the Icelandic króna finally resumed on the open market, with
valuation at around 250 ISK per Euro, less than one-third the value of
the 1:70 exchange rate during most of 2008, and a significant drop from
the 1:150 exchange ratio of the week before. Iceland has appealed to
Nordic countries for an additional €4 billion in aid to avert the
continuing crisis.[74]
On 26 January 2009, the coalition government collapsed due to the public
dissent over the handling of the financial crisis. A new left-wing
government was formed a week later and immediately set about removing
Central Bank governor Davíð Oddsson and his aides from the bank through
changes in law. Oddsson was removed on 26 February 2009.[75]
Thousands of Icelanders have moved from the country after the collapse,
and many of those moved to Norway. In 2005, 293 people moved from
Iceland to Norway; in 2009, the figure was 1,625.[76] In April 2010, the
Icelandic Parliament‘s Special Investigation Commission published the
findings of its investigation,[77] revealing the extent of control fraud
in this crisis
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