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Icelandic Community Bank Underway

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Icelandic Community Bank Underway

Money - Icelandic Króna

Photo: Páll Kjartansson

Preparations are underway for the establishment of a new community bank, Heimilisbankinn (‘The Home Bank’), RÚV reports. A meeting to introduce the project is planned for May 24, and following that, a preparatory meeting for the establishment of the bank will be announced. A spokesperson for the project describes the bank as a new alternative in the Icelandic economic sector.

Following the financial crisis in 2008, discussions began within The Homes Association about the necessity of establishing an Icelandic community bank, based on a foreign model. The establishment of such a bank was discussed at the Association’s board meeting in August of 2009.

Recently, the website heimilisbankinn.is was launched. Hólmsteinn Brekkan, CEO of the Icelandic Renters’ Association is on the preparatory committee. He is familiar with the operations of community banks in Europe, which he claims were hardly affected by the financial crisis. He says there are calls for a new alternative in the Icelandic economic sector.

“Of course community banks are never investment banks or in other words casinos,” Hólmsteinn told RÚV. “They only handle commercial banking service, deposits and lending, where the focus is on service at a moderate cost and at a moderate interest. Then the profit from running the bank goes mainly into funding the nearby community.”

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