The Central Bank has today published its Financial Stability Report. It includes discussion of the macroeconomic environment and financial markets, financial companies and the payment and settlement systems. The introduction outlines the main findings of the Bank’s analysis of financial stability this year. The Bank’s overall finding is that the Icelandic financial system is broadly sound in spite of rapid expansion and the macroeconomic imbalances that it will need to face in the years immediately ahead.

Since 2000 the Central Bank has published a twice-yearly analysis of factors concerning financial stability in its quarterly Monetary Bulletin. As of this year, this analysis will be presented in the form of a separate publication, Financial Stability Report. The report is published simultaneously in Icelandic and in English translation on the Central Bank of Iceland website.

For further information, contact Birgir Ísleifur Gunnarsson, Chairman of the Governors of the Central Bank of Iceland, or Tryggvi Pálsson, Director of the Financial Stability Department, tel. +354 569-9600.

No. 10/2005

April 26, 2005