## Iceland: Financial Sector Assessment Program-Technical Note on Detailed Assessment on Basel Core Principles for Effective Banking Supervision

_IMF Staff Country Reports, July 28, 2023_

## Source details

**Canonical URL:** [Iceland: Financial Sector Assessment Program-Technical Note on Detailed Assessment on Basel Core Principles for Effective Banking Supervision](https://www.imf.org/en/publications/cr/issues/2023/07/26/iceland-financial-sector-assessment-program-technical-note-on-detailed-assessment-on-basel-537051)

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## Bibliographic details
- Published: July 28, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400252310.002

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### Overview
- Presents Detailed Assessment on Basel Core Principles (BCP) for Effective Banking Supervision for Iceland.
- Notes that the Ministry of Finance and Economic Affairs/parliamentary budgetary processes, a legacy funding structure from the prior Fjármálaeftirlit, hamper Central Bank of Iceland’s (CBI) ability to access funding for banking regulation and supervision.
- Reports that key legislative amendments have been enacted in the banking laws to ensure Iceland’s compliance with the European Union’s regulatory framework for banking supervision.

### Capital, Liquidity, and Risk Profile
- CBI implements a conservative approach to both capital and liquidity requirements.
- Result: highly capitalized and adequate liquidity levels for banks.
- Identifies market risk, credit risk, and operational risk among subject matters assessed.

### Supervisory Capacity and Resourcing
- CBI/Financial Supervisory Authority’s current complement of banking supervisors, including risk specialists, is strong.
- However, a few risk areas need augmentation.

### AML/CFT Framework and Implementation
- CBI’s banking supervisory and regulatory framework pertaining to Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) requirements is considered adequate.
- CBI has made great efforts to build up expertise in AML/CFT to implement a risk based supervisory assessment model for banks.
- CBI has carried out deep on-site inspections to assure itself of the effectiveness of banks’ risk management practices regarding compliance with applicable AML/CFT legislative and supervisory requirements.

### Summary of Subject Coverage
- Bank supervision
- Credit risk
- Financial regulation and supervision
- Financial sector policy and analysis
- Financial stability assessment
- International organization
- Market risk
- Monetary policy
- Operational risk

### Keywords Highlighted
- adequacy ASSESSMENT program
- ASSESSMENT methodology
- Baltics
- Bank supervision
- banking authority
- Basel committee
- Credit risk
- Financial stability assessment
- Global
- Market risk
- Operational risk
- risk management

### Key statistics and identifiers
- Pages: 299
- Volume: 2023
- Issue: 283
- DOI: https://doi.org/10.5089/9798400252310.002
- ISBN: 9798400252310
- ISSN: 1934-7685

*Iceland: Financial Sector Assessment Program-Technical Note on Detailed Assessment on Basel Core Principles for Effective Banking Supervision*

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_Source: https://www.imf.org/en/publications/cr/issues/2023/07/26/iceland-financial-sector-assessment-program-technical-note-on-detailed-assessment-on-basel-537051_