Central Bank of Iceland
Iceland’s new macroeconomic council faces up to wage challenges
Collaboration between government, central bank and labour market groups aims to bring bouts of rapid wage growth under control and better co-ordinate policy
People: Hungarian board member takes government post; new RBI executive director
Member of Central Bank of Hungary’s monetary council resigns to take government role; RBI chooses new executive director; Icelandic head of financial stability moves to Yale; and more
Iceland expands policy framework with capital flow tool
Central bank embraces idea of monetary policy dilemma, not trilemma, imposing reserve requirements on certain types of capital flows into the economy
Iceland prepares for offshore króna auction
Date set for major step towards lifting capital controls, as holders of offshore króna are offered chance to swap currency, albeit at punitive rates
Iceland central bank suggests tightening to come
Many domestic factors set Iceland apart from other industrialised countries, and it may need to adopt a tighter policy stance in future
People: Lithuania reappoints governor; Carstens retains BIS posts
Vitas Vasiliauskas handed second five-year term; Carstens will continue to chair the BIS’s global economy meeting and economic consultative committee; ex-Iceland governor to run for president
Conditions for lifting capital controls ‘could hardly be better' – Guðmundsson
Central Bank of Iceland governor says it is important to press ahead with liberalisation while the economy is strong and financial system stable, in latest financial stability report
Capital flow measures needed before offshore krona auction, says Guðmundsson
If the currency auction goes to plan, inward flows could strengthen and the Central Bank of Iceland needs the tools to resist them, its governor says
Inflation and unemployment affect wage rigidity, Icelandic authors find
Research challenges New Keynesian assumption that timings of wage changes are exogenous, showing level of inflation and unemployment also matter
Capital controls essential for small open economies, Guðmundsson says
Small open economies cannot conduct fully independent monetary policy if they are unwilling to use capital controls at least some of the time, Icelandic governor says
Central Bank of Iceland under scrutiny on crisis response
Supervisory board to investigate complaints over the handling of breaches in capital controls and legal uncertainty surrounding the holding company established by the central bank
Improved inflation outlook gives Icelandic central bank room for manoeuvre
Shallower path for near-term inflation allows central bank to make smaller rate hike than planned, but the longer-term picture still shows inflation overshooting the target
Central Bank of Iceland approves failed bank plans
Central Bank of Iceland approves ‘composition agreements’ by failed banks, offering them the opportunity to duck a heavy stability tax
Central Bank of Iceland delays report as tensions over failed banks rise
Central bank postpones launch of financial stability report at last minute, citing the need to wait for new information; governor responds to lobby group calling for heavier tax on failed banks
Iceland hikes again amid inflation shock
Large wage increases force central bank to reassess its inflation forecast and hike rates for a second meeting in a row, with more likely to follow
Iceland’s Guðmundsson sees role for IMF as arbiter of capital flows
Small open economies are being forced to take sub-optimal actions to defend themselves from capital flows, and while global ‘rules of the game’ are far off, IMF monitoring could be a first step
Icelandic paper looks for early-warning signals across past crises
Working paper identifies six clusters of financial crises in the country since 1875; finds macroeconomic variables give a ‘more robust warning signal’ than financial alternatives
Iceland offers pension funds relief from capital controls
Pension funds will have access to a limited amount of foreign currency in an effort to smooth the transition as controls are lifted
Iceland’s Guðmundsson plans post-capital controls monetary redesign
‘Inflation targeting plus plus’ would help the small, open economy to pursue independent monetary policy, insulated from violent capital flows, the Icelandic governor tells Central Banking
Iceland raises rates by 50bp and warns more will follow
Central bank says it will take ‘appropriate countervailing measures’ if the increase in government revenues from failed bank asset tax is used to stimulate the economy
Iceland launches plan to lift capital controls
Failed banks' estates must agree settlement with creditors within six months or face heavy one-off tax; either way this should pave way for controls to be lifted next year
Central Bank of Iceland prepares for ‘substantial’ interest rate increases
Minutes show MPC grappling with uncertainty around pay increases but board members agree interest rates will soon have to move upwards sharply; one member dissented from rate hold
Iceland prepares to hike rates despite low inflation
Expectations of ‘very large’ pay increases combined with flat productivity and strong demand growth prompt MPC to signal a coming hike, despite inflation at 0% when house prices are stripped out
‘Severe’ risks around lifting capital controls, Icelandic report warns
Financial stability report highlights need for careful preparation before capital controls can be lifted; governor says most expected capital movements have been ‘well mapped out’