The EU is deliberating the introduction of an explicit ""European mandate"" for financial sector supervisors to supplement national mandates. Suggestions are made on (i) the formulation of a European mandate; (ii) the policy areas to which it should apply; (iii) which institutions should be given...

Iceland has made considerable progress under an economic program supported by the Stand-By Arrangement (SBA). Successful implementation of fiscal adjustment, effective use of capital controls, and financial sector restructuring have underpinned the recovery. Executive Directors emphasized that...

Iceland’s gross external debt rose above 600 percent of GDP, while households and corporations accumulated heavy debt burdens with large exposures to foreign exchange and inflation risk. The global banking crisis exposed Iceland’s vulnerabilities, triggering a balance-of-payments crisis, a...

This paper examines key findings of Iceland’s Request for a Stand-By Arrangement from the IMF. Iceland’s economy is in the midst of a banking crisis of extraordinary proportions that is expected to lead to a deep recession, a sharp rise in the fiscal deficit, and a dramatic surge in public...

In this study, during 2008, the financial crisis lead Iceland’s public debt to soar from under 30 percent of GDP to more than 100 percent of GDP, and while underlying external debt came down sharply, it remains elevated at close to 300 percent of GDP. First, external sustainability is...

The Icelandic government has launched a review of the tax system, with a view to improving its income redistribution, growth orientation, and efficiency features, as well as increasing its revenue mobilization potential. It aims at minimizing detrimental effects on employment and growth, and at...