Financial interactions between the Central Bank of Iceland and the Government

The Central Bank of Iceland and the Ministry of Finance and Economic Affairs have negotiated an extension of the maturity date of the bond issued by the Treasury at the end of 2008 to strengthen the capital position of the Central Bank in the wake of the banks' collapse.

The outstanding balance of the bond, which matures on 1 January 2014, is just over 171 b.kr.

The Ministry and the Bank have been reviewing various aspects of the financial interactions between the Bank and Government, including guidelines for the Bank's equity and the payment of dividends to the Treasury.

It has been agreed to conclude this work by the end of February 2014 so that it will be possible to present a bill of legislation amending the pertinent provisions of the Central Bank Act at the spring legislative session. At that time, decisions will be taken on the terms of the bond, based on the results of the review.

This press release is identical to that published by the Central Bank of Iceland.

Further information can be obtained from Esther Finnbogadóttir tel: +354-5459200.