28 June 2016

Bank for International Settlements Annual Meeting

Central Bank of Iceland

Central Bank of Iceland Governor Már Guðmundsson attended the annual meeting of the Bank for International Settlements (BIS) in Basel, Switzerland, on 26 June 2016. The Bank for International Settlements is owned by 60 central banks. It is a forum for international collaboration among central banks, as well as a research institution and a bank serving central banks around the world.

At the annual meeting, the bank’s annual report was presented, including the annual accounts, a discussion of the global economic situation, and a summary of topics relevant to central banks. BIS General Manager, Mr. Jaime Caruana, reported on the highlights of the annual report at the meeting. The realignment in the global economy following the financial crisis and the ensuing economic contraction is still underway. In the recent past, GDP growth has been uneven, and weaker than before the crisis. It is stronger than public discourse indicates, however, and is above the historical average when adjusted for demographic trends. But the realignment is still incomplete and confidence is fragile. Interest rates have fallen further, and currency exchange rates and commodity prices have been volatile. Mr. Caruana discussed the risky trinity of debt accumulation, weak productivity growth, and reduced scope for economic policy. This begets three threats: economic instability, very low interest rates, and loss of confidence in economic policy. Under these circumstances, fiscal policy and structural reforms must contribute more to economic policy.

The Bank for International Settlements prepares its financial statements using special drawing rights (SDR) as its functional currency. During the last accounting year, which ended 31 March 2016, the bank’s net profit totalled just under SDR 413 million, or slightly more than 71 billion Icelandic krónur. At the annual meeting, it was decided to pay dividends in the amount of SDR 215 per share. As the Central Bank of Iceland holds 1,070 shares in the bank, it will receive a dividend of just under 40 million krónur.

Further information can be obtained from Már Guðmundsson, Governor of the Central Bank of Iceland, at tel: +354 569-9600.

Press release no. 18/2016,
28 June 2016

BIS Annual Report 2016

General Manager Jaime Caruana´s report on the highlights of the BIS Annual Report