The Central Bank Of Iceland (Icelandic: Sežlabanki Üslands) Is The Central Bank Of Iceland. In 1961, The Icelandic Parliament Legislated To Break Up The Central Bank Department Of Landsbanki Üslands, Which Has Had Limited Monetary Policy Authority Since 1927.
The Icelandic Government Holds The Central Bank Of Iceland And Is Governed By A President And A Seven-member Supervisory Board. The Board Is Elected By The Icelandic Parliament. It Has The Authority To Issue Icelandic Krona Banknotes And Coins, And The Responsibility Of Managing The Country's Foreign Exchange Reserves.
Although Nominally Independent, The Central Bank Of Iceland Has Historically Been Expected To Follow The Direction Of Central Government Policy. However, A Floating Exchange Rate System Was Implemented In 2001. Since Then, The Central Bank Has Been Empowered To Adopt Inflation Targeting And Manage Monetary Policy, Thus Achieving Price Stability Without The Influence Of Central Government Policies.
Monetary Reform
In 2015, Following The Icelandic Financial Crisis Of 2008-11, The Icelandic Government Considered A "revolutionary Monetary Proposal" To Abolish Private Monetary Expansion And End The Fractional Reserve Banking System. Similar To The Swiss Sovereign Monetary Plan, The Plan Would Strip Commercial Banks Of The Power Of Monetary Expansion And Hand It Over To The Icelandic Central Bank.
