The Central Bank of Iceland was established by law in 1961. Prior to this, Landsbanki Íslands had played a partial role as a central bank since 1927, when its organisation was changed and it was given the exclusive right to issue banknotes. The issuance of Icelandic banknotes has a longer history, however.
In the decades that have passed since the establishment of the Central Bank of Iceland, various changes have taken place in the bank's operations and working environment, although some of the bank's main tasks have remained virtually unchanged.
The bank's Board of Governors was initially composed of three governors. Jóhannes Nordal was the longest serving governor from 1961 to 1993, i.e. for 32 years, of which 29 years, from 1964 to 1993, as chairman of the Board of Governors. The first chairman of the Board of Governors was Jón G. Maríasson, but the longest serving chairman of them all was Jóhannes Nordal, from 1964 to 1993. In 2009, the Act on the Central Bank was amended with the recommendation that there should be just one Governor operating at the bank and one Vice Governor. At the beginning of 2020, a new Act came into force, stipulating one Central Bank Governor and three deputy governors. The current Governor of the Central Bank is Ásgeir Jónsson. The Deputy Governor for Monetary Policy is Thórarinn G. Pétursson, the Deputy Governor for Financial Stability is Tómas Brynjólfsson and the Deputy Governor for Financial Supervision is Björk Sigurgísladóttir.
The number of employees at the bank has undergone several changes since the beginning. At the end of the first year of its operation, there were 61 employees. In the following years, that number increased significantly right up until the 1990s, when there were around 150 employees. After that, various activities of the bank decreased in connection with, i.a. capital controls surveillance, in addition to which banking supervision was transferred from the Central Bank when the Financial Supervisory Authority was established. The number of employees then increased somewhat following the economic difficulties in autumn 2008, and by the end of 2018 there were 181 employees. Following the merger with the Financial Supervisory Authority at the beginning of 2020, the number of employees at the bank increased considerably, reaching a total of 298, composed of 155 men and 143 women. The average age of employees was then 46.
The Central Bank of Iceland building on the hill at Arnarhóll is one of the most distinctive buildings in the heart of the Reykjavík city centrum. The cornerstone of the building was laid by the then-current president of Iceland, Ms. Vigdís Finnbogadóttir, on 6 May 1986. The Bank moved into its new headquarters in 1987, after having shared facilities with Landsbanki Íslands in three buildings located in Austurstræti and Hafnarstræti. For the most part, the building at Arnarhóll is custom-designed for the operations of the Central Bank and related entities. It is over 13,000 square metres in size and consists of the main building, which is five storeys tall from the Arnarhóll entrance and six storeys on the Skúlagata and Kalkofnsvegur entrance, and an adjacent building of two to three storeys. A subterranean basement lies beneath the entire building.
The building was designed by architects Guðmundur Kr. Guðmundsson and Ólafur Sigurðsson. The outer walls that face Kalkofnsvegur call to mind a fortress, reflecting the emphasis on durable long-term construction and little need for maintenance. The exterior is clad in part with aluminium, making the Bank headquarters one of the first buildings in Iceland to feature aluminium siding. The exterior of the adjacent building and the pillars of the tall portion of the main building are clad with gabbro from Hoffell in Hornafjörður fjord.
The construction of the Central Bank building has a long history. The Bank shared facilities with Landsbanki Íslands for nearly three decades. In 1978 it bought a small building on a large lot at Einholt 4 in Reykjavík, in order to merge its storage facilities, which were located in three different places in the city. A three-storey building some 2,000 square metres in size was built on this lot. This building now houses the majority of the Bank’s archives and library, together with documents from the Central Bank and National Museum of Iceland’s joint Numismatic Collection and the garages for the Bank’s motor vehicles.
Preparation for the construction of the Bank’s new headquarters moved forward in 1981, with the conclusion of an agreement with the City of Reykjavík providing for a swap of a lot owned by the Central Bank in Sölvhólsgata and the Swedish freezer plant lot at the northern end of Arnarhóll. Early in 1982, the City of Reykjavík Planning and Building Committee approved the architectural drawings for the new bank headquarters, and construction began. A celebration was held to commemorate the new construction in July 1984, and work began on exterior insulation and cladding. The cornerstone was laid by the president of Iceland, Ms. Vigdís Finnbogadóttir, on 6 May 1986.
During the construction phase, the City of Reykjavík and the Central Bank held a competition for ideas on the role and development of Arnarhóll, with an eye to beautifying the city and honouring Ingólfur Arnarson, Reykjavík’s first settler.
The building has housed other institutions in addition to the Central Bank. The Icelandic Banks' Data Centre has maintained offices there, and the National Economic Institute of Iceland was housed there during its tenure of operation.
The Central Bank of Iceland library has two main functions: as a site for preservation of materials related to Iceland’s economic history, and as an institutional library for day-to-day use within the Bank.
The Central Bank of Iceland archive operates in compliance with the Act on Public Archives, no. 77/2014. The Bank’s documents extend back to its establishment in 1961. For the first twenty years, the Central Bank and Landsbanki Íslands jointly operated the archive containing documents of both institutions from the date of their establishment. According to an agreement concluded in 1981, Landsbanki Íslands earlier accounts and documents were to remain in the Central Bank archive. Documents dating from 2002 onwards have been recorded systematically in the Bank’s electronic archive management system.
The numismatic collection consists mainly of Icelandic banknotes and coins.
The Central Bank and the National Museum of Iceland operate the numismatic collection jointly, in accordance with an agreement ratified by the Minister of Education, Science and Culture on 28 January 1985. According to the agreement, the numismatic materials owned by both institutions shall be held in a single collection operated by the Bank; however, coins and other artefacts found during archaeological excavations are still held at the National Museum of Iceland.