Iceland introduced a bill to give the central bank more power to conduct stress tests and impose fines on financial institutions not complying with rules on capital adequacy and liquidity in kronur and foreign currencies prior to lifting capital controls.
“It’s important that Sedlabanki has a clear overview over liquid assets and the foreign exchange balance” of Icelandic lenders, according to the bill posted on the parliament’s website late yesterday. Once passed, the central bank will be “able to gather the information it deems necessary to conduct stress tests and other analysis in the run up to removing capital controls.”
Iceland’s new government, which took office after winning the April 27 elections, has set removing capital controls as a key goal. The restrictions are blocking as much as $8 billion in kronur-denominated assets from leaving the economy.
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