Iceland’s Central Bank Governor Reappointed

Már Guðmundsson has secured a second five-year term as Iceland’s Central Bank Governor, reports WSJ.

Már first took the reins at the central bank, Seðlabanki, in 2009 following the financial crisis which saw three of Iceland’s largest banks buckle under crushing debts and the overall collapse of Iceland’s financial sector.

Although the Icelandic economy contracted 6.6% in 2009 and a further 4.1% in 2010, the International Monetary Fund predicts economic output will rise around 3% this year and next. The IMF credit the success to policy decisions taken by the central bank and lawmakers at the height of the crisis.

These measures included public spending cuts, deciding to let the bank fail rather than bail them out, as well as draconian capital controls which have yet to be removed. Már plans to make easing capital controls a top priority going forward.

To win reappointment Már had to fight off competition from two Icelandic economists, Ragnar Árnason and Friðrik Már Baldursson, after the Finance Ministry opted to advertise the post of central bank governor rather than simply renew Már’s mandate.