New Bill Introduced Altering the Administrative Structure of the Central Bank of Iceland

Today, 6 February, Prime Minister Jóhanna Sigurðardóttir introduced a bill of legislation in the Icelandic parliament Althingi amending the Act on the Central Bank of Iceland. The amendments would replace the three Governors currently comprising the Bank’s Board of Governors with a single Governor, appointed by the Prime Minister for a seven-year term after the position has been advertised.

A new Monetary Policy Committee is to be established, comprised of five members: the Governor of the Central Bank, who will chair the committee, two of the Bank’s executives responsible for formulating and implementing monetary policy, and two experts appointed by the Governor after obtaining the endorsement of the Prime Minister. The Monetary Policy Committee is to take all decisions on applying the Bank’s monetary policy control mechanisms.

The Prime Minister wrote the present Board of Governors on 2 February, requesting that they resign to facilitate the above-mentioned administrative restructuring.

Bill of Legislation (PDF file)