The minutes for the meeting of the Financial Stability Committee from 2 and 3 June 2025 have been published.
At its meeting 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, as well as global developments. Among other topics, they reviewed developments in domestic financial markets, private sector indebtedness, the real estate market, and financial institutions’ resilience, including their capital and liquidity positions. In particular, the Committee discussed borrower-based measures, the Central Bank’s policy on payment intermediation, and the structure of the Bank’s liquidity facilities. In addition, the FSN was given a presentation on the outlook for the balance of payments and Iceland’s external position. A separate discussion focused on the status of construction companies and banking system lending to the sector. The FSN was also given a presentation on investment and project financing in the land-based aquaculture industry.
The Committee decided to hold the countercyclical capital buffer (CCyB) unchanged at 2.5%, which is the upper end of the 2-2.5% boundary defined by the FSN as the neutral buffer rate. The Committee underscored the importance of continuing to work towards greater operational security in payment intermediation. It also stressed that Iceland’s financial market infrastructure must be secure, effective, efficient, and accessible. Targeted work towards greater resilience in payment intermediation must continue, including the establishment of alternate solutions such as an independent domestic retail payment solution and an offline payment card solution.