Draft Bill for Íslandsbanki Stake Sale Published Skip to content
Minister of Tourism, Industry, and Innovation Þórdís Kolbrún Reykfjörð Gylfadóttir
Photo: Golli. Þórdís Kolbrún Reykfjörð Gylfadóttir.

Draft Bill for Íslandsbanki Stake Sale Published

The Icelandic Ministry of Finance and Economic Affairs has published a draft bill for the sale of the state’s 42.5% stake in Íslandsbanki. The bill, necessitating parliamentary approval, aims to reduce the Treasury’s financial risk and debt ratio.

Íslandsbanki prohibited from direct participation

Yesterday, the Ministry of Finance and Economic Affairs published a draft bill regarding the disposition of the state’s share in the Íslandsbanki Bank through the government’s online consultation portal. The draft authorises the minister, with Parliament’s approval, to dispose of the state’s share in Íslandsbanki. The state owns a 42.5% stake in Íslandsbanki.

The disposal of the share is planned through one or more tranches in a marketed offering, allowing the general public to participate, with sales to individuals given priority. The draft notes that it is important to consider market conditions for timing the offerings. According to the bill, Íslandsbanki is prohibited from directly participating in the sale, in line with recommendations from the National Audit Office.

“During the sales process, care must be taken to adhere to the fundamental principles of equality, transparency, efficiency, and impartiality. This obligation is specifically imposed on the minister … to ensure transparency in connection with the disposal, among other things, by proactively publishing information,” the memorandum notes.

State Financial Investments not involved

The bill proposes eliminating the role of the State Financial Investments in the sale of the shares. The Ministry states in the bill’s explanatory memorandum that the preferred option is to authorise the sale of Íslandsbanki under the control of the Minister of Finance and Economic Affairs through specific legislation. It will be up to the Parliament to decide which sale methods are authorised.

“The sale of the equity stake is considered quite urgent in order to reduce the financial risk of the treasury and to contribute to the main objectives of the public finance policy regarding the reduction of the treasury’s debt ratio.”

As noted by RÚV, nearly eight months have passed since the release of the Financial Supervisory Authority’s critical report on the state treasury’s sale of shares in Íslandsbanki. There were several issues with the sale process, and Íslandsbanki received a hefty fine for its role in the sale. Bjarni Benediktsson stepped down as Minister of Finance and Economic Affairs after the Parliamentary Ombudsman’s opinion was published and switched ministerial roles with Þórdís Kolbrún Reykfjörð Gylfadóttir.

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