The Financial Stability Committee (FSN) of the Central Bank of Iceland takes decisions on the application of the Bank’s financial stability policy instruments. Financial stability means that the financial system is equipped to withstand shocks to the economy and financial markets, to intermediate credit and payments, and to diversify risks appropriately.
At its meeting of 21 and 22 September 2026, the Committee was given a presentation on developments and prospects for the economy and for financial stability. Members discussed key risks to financial stability in Iceland and developments internationally. They reviewed developments in domestic and foreign financial markets, the external position of the economy, and the foreign exchange market. They discussed households’ and businesses’ position, developments in the residential property market, and construction companies’ position, as well as financial institutions’ resilience and their capital and liquidity. The FSN also discussed overall capital requirements for the systemically important banks, the designation of systemically important financial institutions, and the portion of the European Commission’s communication on the competitiveness of the banking sector that focused on the simplification of capital buffers. The Committee was given a presentation on the Central Bank’s draft policy strategy on financial stability and macroprudential policy, and a presentation on stablecoins and their potential impact on financial stability.
The FSN decided unanimously to hold the countercyclical capital buffer (CCyB) unchanged at 2.5% of domestic exposures. The buffer rate therefore remains at the upper end of the 2-2.5% range that the Committee has designated as the neutral value, which indicates that the level of financial system risk is neither unusually high nor unusually low.