Pressures increase from regulated entities, which complain about regulatory uncertainty, and from policy-makers, who are keen to foster economic recovery and growth after 8 years of low economic performances almost a lost decade! Keeping the momentum relates to three objectives: –  complete the regulatory agenda, in particular regarding what is named now as “market-based finance”, so as to effectively and comprehensively strengthen the financial system and remove regulatory uncertainty;  –  make sure that the regulatory spectrum expands well beyond the sole banking sector so as to avoid unfair level playing field, regulatory arbitrage and a paradoxical outcome that is favoring and encouraging those who are still “in the shadows.” On top of that, keeping pace with the creativity of all players is no small challenge. BIS central bankers’ speeches  1  –  devoting adequate resources and designing the proper organization of supervision which needs to be intrusive. 2  Preserving diversity  While the objective of expanding the scope of regulation beyond the banking sector may require applying similar – though not identical- regulation to similar asset classes or risks, irrespective of the legal status of the intermediary bearing them, it must also be acknowledged that business models, accounting frameworks, liability structures, time horizons of decisions may differ across sectors and entities. In that respect, it can be argued that that “one size does not necessarily fit all” and that one should preserve and ensure diversity.
It is therefore of vital importance that we agree as a society to maintain economic stability through thick and thin. Honoured guests: Influenza epidemics are nothing new. In the past 500 years or so, there have been about two to three influenza pandemics per century. It is likely that no one remembers the Asian flu of 1957 or the Hong Kong flu of 1968 any longer. But these were deadly pandemics that took place in the twentieth century, even though they paled in comparison with the Spanish flu, which killed between 21 million and 50 million people worldwide. What is unique about COVID-19 is not the illness itself but the response to it. The disease control measures adopted around the world are unparalleled. They come at an enormous economic cost and could easily bring with them a deep, but hopefully short-lived, economic recession. Lost output and income are a price we are prepared to pay to save lives. I consider it extremely important that we Icelanders remember this first, before we yield to the temptation to whine, turn pessimistic, and pity ourselves. We must all make sacrifices that will hopefully save lives, but no rescue package from the Government can mitigate the inconvenience except to a very limited degree. As I mentioned before, the Financial Supervisory Authority and the Central Bank merged at the beginning of this year. Although a great deal of work on merging and integrating our operations lies ahead, our unified institution has begun the year well.