Icelandic lawmaker: ‘parliament would support bank compensation accords’

One of Reykjavík’s top officials has said that the country’s government would back Iceland’s central bank if it opts to derail composition agreements in order to relieve pressure on the nation’s unstable currency.

The comments came on Friday (9th November) via Helgi Hjorvar, the chairman of Reykjavík’s economy and tax committee. He told Bloomberg reporters, “Parliament will do anything and everything to assist the central bank’s objective to maintain financial stability in the country.”

Hjorvar went on to add that, “parliament will support the central bank” if it intends to block composition agreements in the nation’s recovering banking sector.

The news comes as the Icelandic government continues to prepare for the lifting of capital controls put in place following the 2008 collapse of Landsbanki Islands hf, Kaupthing Bank hf and Glitnir Bank hf. Experts estimate the restrictions have kept investors from selling off offshore kroner assets worth up to USD 8 billion (EUR 6.3 billion).

Meanwhile, ministers are considering options to prevent the burst of a housing bubble created by the implementation of the controls, according to reports issued last week.

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