Iceland’s decision to advertise the position of central bank governor and plans to change the bank’s management jeopardize financial stability and upset the removal of capital controls, according to a central banker.
Iceland advertised the position of central bank governor after the current incumbent Mar Gudmundsson questioned the government’s intention to push through the world’s biggest household debt relief program.
Iceland Finance Minister Bjarni Benediktsson said his country hasn’t yet decided whether it can commit to an election pledge to drop its European Union accession bid as it awaits the findings of a report.
More than five years after its biggest banks defaulted on $85 billion, Iceland’s government is refusing to speak to the hedge funds and other creditors that are still trying to get their claims paid out.
The party ousted from government in 2009 after presiding over Iceland’s financial meltdown emerged as the biggest winner in the weekend’s parliamentary elections as talks start to form a ruling coalition.
When Iceland’s banks failed in 2008 under $85 billion of debt, dozens of hedge funds flocked to the island betting they could make money buying up creditor claims. Five years later, they’re still waiting.