The Future Structure of the Icelandic Financial System

The government is currently reviewing the regulatory framework for the financial sector. The Ministry of Economic Affairs published an extensive review on the future structure Icelandic financial sector last March and in the aftermath a group of experts were appointed to formulate policy recommendations to be presented this autumn.

The expert group was asked to examine thoroughly the Minister‘s report as well as opinions and comments on it expressed in the parliamentary, stakeholder and expert debate outside parliament. Based on the report and other available information the expert group shall:

  1. Examine the changes made in the regulatory framework and supervisory practices for the financial market in Iceland in response to the financial collapse of 2008;
  2. analyze remaining weaknesses in the regulatory framework of the financial and related markets, supervisory practices and implementation and make proposals on improvements;
  3. propose changes, based on relevant research and comparison with alternative arrangements, on improved distribution of functions between participants in the financial market, and the strengthening of the institutional structure of financial supervision at both micro-prudential and macro-prudential level;
  4. present proposals on how best to organize a comprehensive and consistent  regulatory framework for the financial market as a whole.

The group is asked to submit to the Minister proposals on amendments to the legal framework of the financial market and in particular the laws on the remit of the Central Bank of Iceland and the Financial Supervisory Authority of Iceland. 

Based on these proposals the Minister will submit a bill of law to the Althingi during its autumn 2012 session. The expert group will advise the Ministry on the drafting of this bill of law.