The bank deposits of Icelandic households amount to ISK 734 billion. This means that each Icelandic resident has an average bank balance of ISK 2.3 million (USD 17,900) in their accounts.
Bank balances were one of the subjects of today’s Islandsbanki morning bulletin. According to the bulletin, the total amount of bank deposits in Iceland and the total banknotes and coins in circulation amount to ISK 1,582 billion. In comparison, the figure was ISK 1,622 billion at the end of 2008 and had grown by ISK 400 billion that year.
The breakdown of money in the economy shows that households were the biggest money holders at the end of March, with roughly ISK 734 billion in bank deposits. Household bank balances increased by ISK 104 billion directly after the banking collapse in autumn 2008 as householders put extra emphasis on saving over spending – but that figure has reduced slightly since.
Households, along with pension funds, had the biggest role to play in 2008′s total deposits increase. Since the banking collapse, most of the Icelandic pension funds have been keeping as much of their total assets in bank accounts as the law allows. Funds may hold up to 10 percent of their assets in savings accounts. At the end of March, the pension funds had ISK 148 billion in bank deposits.
This cant’ be completely correct reporting. Band deposits in a nearly completely electronic money system such as Icelands are the de facto money supply. This should be stable, and certainly Households can’t add money in the way the article is suggesting.
Only the central bank should be able to do that.
Hi there,
It is true that households do not add money; but they do store it in their bank accounts. This article refers to the biggest pools of money, not the biggest creators of it.
Hope this helps.
Alex,
editor
Wow – you do not need to be genius to understand the formula :-)
If 1000′s of creditors all over the world lost their life savings in Iceland and the money did not vanish into a black hole in the universe then it should be somewhere in Iceland right?
If the super-rich bankers helped themselves to the money in Landsbanki and Kaupthing banks them surely their friends and family end up getting some money. They also have to spend to keep up their extravagant lifestyles. Want to make money in Iceland? then sell ultra luxury goods to the Icelanders. They have billions and billions of Dollars and Euros owed to the Creditors that only dream of their money back every night :-)