The Central Bank of Iceland published minutes of its 1-2 June Financial Stability Committee meeting showing that the committee left the countercyclical capital buffer unchanged at 2.5% of domestic exposures and adopted new designations for systemically important financial market infrastructure. The buffer remains at the top of the committee’s 2%-2.5% neutral range, while the infrastructure decision brings five components under heightened oversight because disruptions could affect financial stability. The newly designated components are the Central Bank’s interbank payment system and the Nasdaq securities settlement system, classified as basic infrastructure, and the Financial Market Data Centre’s deposit system and payment system plus Auðkenni ehf.’s electronic authentication for financial services, classified as core infrastructure. In its risk assessment, the committee judged financial stability risks to be broadly unchanged. It said the banking system remains sound, with capital and liquidity above requirements and stress-test results indicating banks could continue supporting the economy under a severe international market shock, but it highlighted elevated geopolitical uncertainty, possible risk build-up in the real estate and construction sectors, and rising cyber and operational threats. The committee said work to strengthen payment intermediation resilience should continue, including diversifying payment channels and accelerating arrangements for operational disruptions. An offline solution for physical payment cards is due in mid-2026, and preparations are underway to enable contactless payments during internet outages.
Central Bank of Iceland2026-07-01
Central Bank of Iceland keeps countercyclical capital buffer at 2.5% and designates five systemically important infrastructure components
The Central Bank of Iceland’s Financial Stability Committee kept the countercyclical capital buffer unchanged at 2.5% of domestic exposures, the top of its 2%-2.5% neutral range. It also designated five financial market infrastructure components as systemically important, including the Financial Market Data Centre’s systems and Auðkenni ehf.’s financial-services authentication, alongside the interbank payment and Nasdaq settlement systems. Risks were assessed as broadly unchanged, but the committee flagged geopolitical shocks, construction-sector exposures and cyber resilience.