Governor Has Faith in the Banks' Sense of “Social Responsibility” Skip to content

Governor Has Faith in the Banks’ Sense of “Social Responsibility”

By Ragnar Tómas

Central Bank
Photo: Golli. Central Bank Governor Ásgeir Jónsson.

A conversation has taken place between Iceland’s Central Bank and managers of the country’s commercial banks, the Governor of the Central Bank revealed at an open meeting before Parliament’s Economic Affairs and Trade Committee today. The Governor is hopeful that the banks’ sense of “social responsibility” will do its part to ease the rising debt burden of the public, RÚV reports.

Continued inflation a disappointment

As noted by RÚV, the Governor and Deputy Governor of the Central Bank answered questions at an open meeting of Parliament’s Economic Affairs and Trade Committee earlier today.

In the meeting, the Governor of the Central Bank, Ásgeir Jónsson, revealed that he had spoken with the managers of the commercial banks about responding to the increased debt burden of mortage payers. Ásgeir stated that he “could not tell the banks what to do” but that he had faith in their sense of “social responsibility,” adding that the banks needed to stand by their customers through thick and thin.

“Inflation has reached 9.9%, which is disappointing. It particularly disappoints me that the price of real estate continues to contribute to inflation,” Ásgeir also observed, observing that economic growth last year had exceeded 6%, which was “huge.”

Rising debt burden among property owners

At the meeting, Ásthildur Lóa Þórsdóttir, Member of Parliament for the People’s Party, expressed concerns about the ever-increasing debt burden of property owners due to high interest rates. Ásgeir responded that he accepted those concerns and informed Ásthildur that a conversation had taken place between the Central Bank and the managers of Iceland’s commercial banks in this regard.

“I can definitely inform you that there has been a conversation with the banks that they will be ready to respond,” Ásgeir remarked, adding that this conversation had taken place in light of the fact that “the situation could change quickly.”

Ásgeir mentioned that the banks had various devices and tools in order to accommodate the public due to the ever-increasing instalments of real estate loans – but that he also placed a certain amount of faith in the banks’ sense of social responsibility.

“I believe that they will stand by their customers through thick and thin; I think this has to be the case,” Ásgeir concluded, hopeful that the banks would accommodate their customers.

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