State’s Banking Administration to be dissolved, stake in financial companies to be managed by Ministry of Finance

The Banking Administration of the state will be dissolved and the Ministry of Finance will instead manage the government’s stake in financial companies, according to plans by the authorities. Roughly two years have passed since the chairmen of the three governing parties announced that the institution would be dissolved, following criticism of the government’s sale of Íslandsbanki, which was then making headlines.

The Banking Administration manages the state’s share in financial companies, including Landsbanki and Íslandsbanki. Once the institution is dissolved, the Ministry of Finance and Economic Affairs will manage the state’s stake in the banks as well as other state companies, such as Landsvirkjun and ÁTVR.

The Ministry of Finance says this arrangement is in line with what is generally practiced within the OECD. The Banking Administration is described as a small institution, its tasks are mostly completed, and therefore it is not feasible to keep it operational any longer.