The Knowledge Bank is an educational centre on the website of the Central Bank of Iceland. Here in the Knowledge Bank you will find a variety of practical information related to finance, economic matters and the activities and function of the Central Bank of Iceland. The Knowledge Bank contains information for students, material that teachers can use and simple explanations for the inquisitive public.
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The purpose of setting rules on how large a loan can be taken out, such as for housing purchases, is, among other things, to counter excessive consumer indebtedness and strengthen the resilience of both borrowers and lenders, i.e. the banks, against a potential turnaround in real estate prices.
Gold has long been part of the Central Bank’s international reserves. The international reserves are a kind of safety fund for the country in foreign currency.
By making the use of money for purchases and investments more expensive and, at the same time, making it more advantageous to save. This is achieved by raising interest rates, which are essentially the price for using money.