Had print money after Russia’s invasion
The Central Bank began to print money after Russia invaded Ukraine. Central Bank Governor Ásgeir Jónsson says that all transactions in Iceland are still being carried out through international card companies and therefore it has been absolutely necessary for the bank to have these banknotes.
When asked, Ásgeir says that it will not be stated how much has been printed or what the bank has a lot of paper notes.
« They are just in the house and they have been printed, but all central banks are now printing and fortunately we were just ahead in the series. »
Want to limit the amount of cash
Ásgeir says banknotes are economically important if technology fails and if it is not possible to receive cards in Iceland for longer or shorter periods or access deposits in bank accounts in other ways.
The Central Bank is authorized by macroeconomic protection to provide certain important service providers to receive cash to ensure that people can use banknotes to buy necessities.
It must be considered interesting, in this connection, that it has been debated whether Icelandic parties are obliged to receive cash at all and some retailers try to refuse to receive cash.
In addition, the government has advocated limiting the amount of cash in circulation to try to counter money laundering. Asgeir says to some extent primitive methods in that fight.
Primitive
« The Financial Supervisory Authority has been building strong defense against money laundering and we have been pushing the banks on processes and more, so we believe we have been very successful in fighting money laundering. Harning banknotes is a rather primitive way, » he says.
Scandinavian authorities have completely reversed this road trip and now they want to secure cash. They have previously wanted to limit the use of cash.
Cash is economically important and it is damaged to remember the state of cash in the country around the banking collapse 2008. Ásgeir comes into these issues in a book he wrote after the collapse.
The days around the collapse of the banks actually became a bank run. People were worried that the banks would fall and their accounts freeze.
Asgeir says that this has happened around the fall of Lehman Brothers in the United States. People then started attending the banks and taking their deposits into cash just as Icelanders did the days around the collapse.
The banknotes to the end of
He says it may not have had a direct impact on the banks, but that all banknotes, on the other hand, were about to be completed in the Central Bank’s treasures. Asked what the bank has done then, Ásgeir says that if the difference does not have the two thousand krónur, the banknote has been alternate.
It rhymes with the sources of Morgunbladid that say that the disposal of the banknotes has been palleted, but by coincidence the disposal has been delayed. Then it was possible to bring those banknotes into circulation.
Asgeir is not ready to confirm that story, but says he can confirm with some conviction that the two thousand krónur banknote has come to the rescue. « It may be quite wondering what would have happened if the banknotes had finished. »
Police appealed to people
Geir Jón Þórisson, the then police officer in Reykjavik, interviewed the media at this time and expressed concern about the increased risk of burglary. Subsequently, the load on cash withdrawal from bank branches decreased a lot and people even started to put the money back in.
Ásgeir says that at this time the banks themselves were worried about their customers, who were then coming out of the banks with even large sums. Security guards have been placed on entry to increase the security of the banks’ customers.
Since foreign exchange transactions had been closed, expensive objects have also begun to sell cruelly; objects that either kept prices or became more valuable with age such as Rolex and expensive cognac. « Because bank deposits are what people are relying on for security. If you fear losing access to bank deposits – people started buying various things and even started buying cars and apartments to find shelter for their money. »
« We have completely wondered this for us«
The Governor says the situation is different now, when concerns are most likely that people lose contact with their accounts for technical reasons.
In this context, he mentions that the Swedish Central Bank is now trying to prepare a banknote distribution center to ensure banknote safety so that people can get banknotes.
« We have totally wondered about this too. I think it is natural that instead of each bank having an ATM, the banks merge with some infrastructure that has this ATM and they are systematically put down in certain places. There is a significant change in how to think about banknotes and coins. »
