Legislation on prudential requirements and the supervision of financial undertakings is fundamentally the same in all Member States of the European Economic Area. In Iceland, financial undertakings operate in accordance with Act No. 161/2002 on Financial Undertakings.
The role of the Central Bank of Iceland is, among other things, to provide forward-looking and risk-based supervision of the activities of financial undertakings, in particular through an analysis of their business models and an assessment of their governance and internal controls, and main risk factors inherent in their activities. In this way the Central Bank promotes the financial health of financial undertakings, sound and proper business practices, and the continued access of households and businesses to reliable and secure financial services.