List of Banks in Iceland

 

 

The Central Bank of Iceland (Icelandic: Se­labanki ═slands) 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 Al■ingi out of the central banking department of Landsbanki ═slands, which had had the sole right of note issuance since 1927 and had conducted only limited monetary policy.

Se­labanki ═slands 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 krˇnur 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.

 

  Contemporary banks

Central
■Central Bank of Iceland

Commercial
■NBI (government-owned, has taken over the Icelandic operations of Landsbanki)
■═slandsbanki (government-owned, has taken over the Icelandic operations of Glitnir and Nři Glitnir)
■Nřja Kaup■ing (government-owned, has taken over the Icelandic operations of Kaupthing Bank)
■Sparisjˇ­abanki (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–Bur­arßs Investment Bank (government-owned)
■Saga Investment Bank

Savings
■Byr sparisjˇ­ur
■nb.is-sparisjˇ­ur hf.
■Sparisjˇ­ur BolungarvÝkur
■Sparisjˇ­ur H÷f­hverfinga
■Sparisjˇ­ur Kaup■ings hf.
■Sparisjˇ­ur Mřrasřslu
■Sparisjˇ­ur Nor­fjar­ar
■Sparisjˇ­ur Ëlafsfjar­ar
■Sparisjˇ­ur ReykjavÝkur og nßgrennis hf. (government-owned, often abbreviated to SPRON)
■Sparisjˇ­ur Siglufjar­ar
■Sparisjˇ­ur Strandamanna
■Sparisjˇ­ur Su­ur-Ůingeyinga
■Sparisjˇ­ur SvarfdŠla
■Sparisjˇ­ur Vestmannaeyja
■Sparisjˇ­ur ١rshafnar og nßgrennis
■Sparisjˇ­urinn Ý KeflavÝk

Defunct banks
■Nři 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)
■B˙na­arbanki (merged with Kaupthing, became KB Bank and later Kaupthing Bank)
■═slandsbanki (First ═slandsbanki was founded in 1904, went bankrupt during the Great Depression. Second ═slandsbanki came into existence when the government owned banks ┌tvegsbanki, Samvinnubanki, I­na­arbanki and Verslunarbanki merged. ═slandsbanki was later re-branded as Glitnir Bank, which was taken into government administration late 2008. The third ═slandsbanki will emerge on 20. February 2009 when the government-owned Glitnir Bank is set to be re-branded as ═slandsbanki)
■┌tvegsbanki (merged with I­na­arbanki, Al■ř­ubanki, Verzlunarbanki and Samvinnubanki)
■Samvinnubanki (merged with I­na­arbanki, Al■ř­ubanki, Verzlunarbanki and ┌tvegsbanki)
■I­na­arbanki (merged with ┌tvegsbanki, Al■ř­ubanki, Verzlunarbanki and Samvinnubanki)
■Verzlunarbanki (merged with ┌tvegsbanki, Al■ř­ubanki, I­na­arbanki 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 krˇna banknote. The Icelandic krˇna is the national currency of Iceland.The national currency of Iceland is the Icelandic krˇna (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 Borgart˙n in ReykjavÝk, 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 DavÝ­ 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 krˇna 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 DavÝ­ 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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