The Central Bank of Iceland has published the working paper "What sets the trend? The evolution and drivers of Icelandic trend inflation" by Bjarni G. Einarsson, economist in the department of Economics and Monetary Policy, and Thórarinn G. Pétursson, deputy governor for monetary policy.

The Bank’s semi-annual Financial Stability report presents an overview of the position of the financial system, its strengths and potential weaknesses, and the macroeconomic and operational risks it may face. In addition, it explains how the Central Bank carries out the tasks necessary for the operation of a sound and effective financial system.

The Icelandic financial system is on a solid footing and is well prepared to withstand unforeseen shocks. The systemically important banks’ financial position is strong, and their access to market-based funding is good. In the recent term, the banks have refinanced foreign market-based debt on favourable terms, with longer maturities.