30 June 2009

New Rules on Central Bank of Iceland Facilities for Financial Undertakings

The Central Bank has recently reviewed and amended the Rules on Central Bank of Iceland Facilities for Financial Undertakings. The revised Rules will take effect on July 1, 2009.

The Rules have been revised with the aim of clarifying what types of facilities the Central Bank offers to financial undertakings. In the main, the new Rules are similar to the current Rules on Central Bank Facilities, no. 808 of August 22, 2008. Two amendments, however, require particular explanation. On the one hand, the Bank has tightened the eligibility rules concerning collateral for Central Bank facilities. The main securities eligible as collateral for Central Bank of Iceland facilities are Housing Financing Fund bonds, Treasury notes, and Treasury bills. On the other hand, the new Rules contain provisions that expand and clarify the Central Bank's authorisation to steer market liquidity.

The Bank will publish on its website a set of terms and conditions that further explain the practical aspects of the Rules.

Further information can be obtained from Gerður Ísberg, Deputy Director of the International and Market Operations Department, at +354 569-9600.



No. 19/2009

June 30, 2009