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Financial stability means that a financial system can withstand shocks in the economy and financial markets, guarantee capital, mediate credit and payments, and spread risk appropriately.

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.

A resolution authority is a government authority that is responsible for preparing and implementing the resolution process of credit institutions and securities firms.

Macroprudential policy is about preserving stability in the financial system as a whole and limiting risks that may threaten it. For this reason, for example, an assessment is made of which banks are most important for the stability of the financial system and they are specifically monitored.

Savings in the form of credit in deposit accounts are insured to a certain extent through the Depositors and Investors Guarantee Fund for financial Undertakings.

The Financial Stability Committee makes decisions on the application of the Central Bank of Iceland's policy instruments to promote and strengthen financial stability.

Banks play a key role in every society. They channel funds from those who save money to those who want to borrow, whether to invest in housing, buy a car, or start a business.