The Central Bank of Iceland is required by law to promote financial stability and sound and secure financial activities. The Bank shall also undertake such tasks as are consistent with its role as a central bank, such as promoting a safe, effective financial system, including domestic and cross-border payment intermediation.
Financial market infrastructures
Financial market infrastructure connects customers with financial institutions and financial institutions with one another, both directly and through markets, and encompasses all types of systems and services that provide for payment intermediation, settlement, or the recording of payments, securities, and other financial transactions. The Central Bank performs a range of functions in this area. It owns and operates certain financial market infrastructures and provides related services, exercises oversight of systemically important financial market infrastructures, and promotes further development, cooperation, and harmonisation in payment intermediation.
Resilience
Financial market infrastructures are fundamental components of the financial system and play a key role in payments, settlement, and the transfer of funds. Their resilience entails the ability to withstand shocks, respond swiftly to operational disruptions, and ensure the continued provision of essential financial services. The Central Bank places emphasis on strengthening the resilience of the financial system as a whole by promoting risk mitigation, coordinated responses, and the operational continuity of the infrastructures on which essential financial services depend.
Interbank payment system
The Central Bank of Iceland’s interbank payment system is an independent system owned by the Central Bank. The interbank system is divided into two components, the gross settlement component (RTGS) and the retail component (EXP). The RTGS component handles large-value payments of 30 m.kr. or more that are transferred between customers of two financial institutions. Payments between financial institutions in amounts of less than 30 m.kr. are routed through the retail component of the system, EXP.
Cooperative forums
The Central Bank of Iceland has established collaborative forums in the field of payment intermediation and financial market infrastructure, with representatives from financial institutions, government authorities, interest groups, and other stakeholders. The work of these forums reflects the Central Bank’s objective for financial market infrastructure, namely that it should be secure, efficient, cost-effective, and accessible, and is intended to promote robust and secure infrastructure that serves the needs of society. The Central Bank’s collaborative forums are the Payments Council, the Rulebook Council, the Strategic Forum, and the Cooperation Forum on the Operational Security of Financial Market Infrastructure (SURF).