Financial Supervisory Authority (Iceland)

The Financial Supervisory Authority (Icelandic: Fjármálaeftirlitið (FME)) is the single supervisory authority for the financial sector in Iceland. Companies regulated by the authority are commercial banks, savings banks, insurance companies, insurance brokers, credit institutions (investment banks and credit card companies), securities firms, securities brokers, mutual funds and pension funds management companies and other entities authorized to receive deposits. The current CEO is Ms. Unnur Gunnarsdóttir, who succeeded the controversial Gunnar T. Andersen in March 2012. Deputy CEO Ragnar Haflidason succeeded Jónas Fr Jónsson in October 2008 and Gunnar T Andersen took over as CEO in April 2009.[2] The first CEO was Pall Gunnar Palsson, who directed from 1999 to 2005.

Financial Supervisory Authority
Fjármálaeftirlitið
Agency overview
Formed1999
JurisdictionIceland
HeadquartersIceland Reykjavík, Iceland
Employees75 (2009[1])
Agency executive
Websitefme.is

History

The FME was established in 1999, under the authority of two acts of legislation, act number 87/1998 on the Official Supervision of Financial Operations and act number 99/1999 on the Payment of Cost Due to the Official Supervision of Financial Activities.

FME and the Icelandic financial crisis 2008

During the 2008–2012 Icelandic financial crisis Jónas Fr Jónsson was the CEO of the FME, both he and the FME were heavily criticized for missing the warning signs and inaction leading up to and during the crisis.[3] The FME played an important role during the crises in late 2008 when the main three Icelandic banks failed:

On October 6, 2008 it was announced that the FME would be given significant additional powers over Icelandic financial institutions by the Icelandic government. Included the power to take over the running of Icelandic banks without actually nationalising them. Immediately the following morning it intervened in the operations of Landsbanki[4] and Glitnir, taking over their operations within Iceland.

On 9 October, Kaupthing was placed into receivership by the FME, following the resignation of the entire board of directors.[5] The bank said that it was in technical default on its loan agreements after its UK subsidiary had been placed into administration.

On 25 January 2009, Björgvin G. Sigurðsson, Iceland's Commerce Minister, resigned citing the pressures of the nation's economic collapse, as the country's political leaders failed to agree on how to lead country out of its financial crisis. One of his last acts as minister was to dismiss Jónas Fr Jónsson the director of the Financial Supervisory Authority (FSA). He was subsequently replaced by Deputy CEO Ragnar Haflidason.

References
  1. Fjármálaeftirlitið, Um FME: Mannauður Archived 2008-10-17 at the Wayback Machine (in Icelandic)
  2. "Eyjan".
  3. Economic Disaster Area (5 September 2009). "Jonas Teaching Business Law and Corporate Responsibility".
  4. http://www.tidarandinn.is/taxonomy/term/219
  5. Financial Supervisory Authority (FME) (9 October 2008). "Based on New Legislation, the Icelandic Financial Supervisory Authority (FME) Proceeds to take Control of Kaupþing to ensure Continued Commercial Bank Operations in Iceland". Archived from the original on October 14, 2008. Retrieved 2008-10-12.
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