Deposits in banks in Iceland have increased significantly since the banking collapse last fall and now amount to a total of ISK 2,000 billion (USD 15 billion, EUR 10 billion). Minister of Business Affairs Gylfi Magnússon encourages savers to invest their money domestically.
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“One could say that the banks are full of money to the brim,” Magnússon told Fréttabladid, stating that there is no need to be hesitant of investing, especially of investing in domestic products.
Landsbanki’s newsletter Hagsjá states that individuals and companies currently prefer saving their money over spending it and therefore deposits are growing rapidly.
Gylfi Arnbjörnsson, president of ASÍ, the Confederation of Labor, said lack of investments when money is available is worrisome.
“The monetary policy is supposed to ensure that high rates will keep the money in the country but because they are so high the money just stays in savings accounts. I don’t see how the banking system can work during these circumstances,” Arnbjörnsson said.