Tryggvi Gunnarsson, the ombudsman for the Icelandic parliament, Althingi, sent an enquiry to the Central Bank of Iceland and the Financial Supervisory Authority (FME) yesterday regarding the guidelines they issued for financial institutions after the Supreme Court of Iceland ruled that foreign currency indexed loans were illegal.
The Althingi parliament. Photo by Páll Stefánsson.
After the ruling was made on June 16, the Central Bank and FME requested that in the case of loans that were deemed illegal, financial institutions should change their interest rate to the lowest rate at the Central Bank and not maintain the interest rate stated in the loan agreements, visir.is reports.
Gunnarsson asks, among other questions, on which legal basis the guidelines were made; what authority the Central Bank and the FME have on deciding how financial institutions handle the treatment and settlement of loans, including the interest rates of these loans, which are agreements between private companies and creditors.