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Foreigner to Lead Iceland’s Central Bank?

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Foreigner to Lead Iceland’s Central Bank?

An interim Central Bank governor will be appointed as soon as the Althingi parliament passes the government’s bill on changes to the bank’s senior management and it takes legal effect. There are speculations that the new governor will come from abroad.

The Central Bank of Iceland. Copyright: Icelandic Photo Agency.

“Two paragraphs of the employee laws do not apply to this interim appointment,” chairwoman of Althingi’s trade committee Álfheidur Ingadóttir explained to Fréttabladid.

“On the one hand, the position does not have to be advertised, since a person is being appointed as acting governor but not permanently appointed to the position, so there are no arguments against that person being of foreign origin,” Ingadóttir said.

According to Fréttabladid’s sources, the government has agreed to appoint someone non-Icelandic as interim governor, but it hasn’t been confirmed.

“If the goal was to force the current Central Bank governors out of their posts, then the hard way was taken,” said Birgir Ármannsson, the Independence Party’s representative on the trade committee.

Ármannsson said the work method of the representatives of the government parties on the committee had been characterized by nervousness—probably because a delegation from the International Monetary Fund (IMF) is expected to arrive to the country today.

Ármannsson stated the government parties had done everything in their power to get rid of the current Central bankers before the IMF delegation’s arrival.

“Then they say it is done to abolish uncertainty, but that isn’t so,” Ármannsson said, adding in explanation, “Because now an interim governor will be appointed to the job and weeks or months could pass before new Central bankers take over permanently.”

After Althingi’s trade committee passed the Central Bank bill last night, the parliament is expected to give it a green light today and the new laws on the Central Bank could take effect as early as tomorrow.

As soon as the bill takes legal effect, the current Central Bank governors, Davíd Oddsson and Eiríkur Gudnason, will automatically be made redundant and replaced by one interim governor.

Click here to read more about the bill being passed by Althingi’s trade committee and here to read about a recent television interview with Oddsson.

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