Icelandic central bank seeks to improve financial position
Bank cuts payments to commercial banks on deposits and may seek capital injection
The Central Bank of Iceland’s monetary policy committee will reduce the interest it pays on the reserves that commercial banks have to deposit with it.
The MPC took the decision at a special meeting on June 4, The move is an attempt to reduce significant annual costs to the central bank. Governor Már Gudmundsson said in an earlier speech, given on April 5, that the bank might also seek a further capital injection from the government.
These costs are caused by what Gudmundsson called a
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