Iceland’s PM to Sack Central Bank Governors Skip to content

Iceland’s PM to Sack Central Bank Governors

By Iceland Review

Prime Minister Jóhanna Sigurdardóttir will present a bill at a cabinet meeting today on amendments to legislation on Iceland’s Central Bank, including reducing the bank’s governors from three to one. The resulting position will be advertised.

Yesterday Sigurdardóttir sent letters to the Central Bank’s three current governors, Ingimundur Fridriksson, Eiríkur Gudnason and Davíd Oddsson, who is also chairman, requesting that they step down as soon as possible to restore faith in the bank and economic management in the country, Morgunbladid reports.

According to Fréttabladid, the prime minister requested an answer from the Central Bank governors by Thursday this week. The governors will then have the opportunity to negotiate the terms of their resignation.

“The government’s most important project is to restore faith in the country’s financial system. There are grounds for changing the Central Bank’s senior management,” Sigurdardóttir said.

“Jóhanna’s declarations on the work of the bank’s board of governors are political and, as some say, border on bullying,” Halldór Blöndal, chairman of the Central Bank’s supervisory board told Morgunbladid.

The prime minister’s bill also includes changes to the appointment process to the bank’s supervisory board.

Blöndal added that Sigurdardóttir’s “political declarations” regarding the board of governors originate in the fact that Oddsson served as leader of the Independence Party for almost 20 years. “There hasn’t been much substantial criticism on the board.”

Gudnason confirmed that the board had received the letter from the prime minister but would not comment on it. “I don’t want to discuss the matter any further. I’m reflecting on it,” he told Fréttabladid.

According to Morgunbladid, Sigurdardóttir’s bill will first be discussed in the cabinet, then at the Social Democrats’ and the Left-Greens’ party meetings and finally with the Progressive Party, who defend the minority government from a vote of no confidence.

“Generally I believe that it can be preferable to change the laws on the Central Bank, but if the matter primarily revolves around replacing the people in charge, there are better ways to go about that,” chairman of the Progressive Party Sigmundur Davíd Gunnlaugsson told Fréttabladid.

Click here to read more about the tasks awaiting the new government.

Photo originally published on the website of the Althingi parliament.

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