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Agreement with Advisors to Work on Removal of Capital Controls

The Ministry of Finance and Economic Affairs has, in consultation with the Ministerial Committee on Economic Affairs and the Steering Group on Removal of Capital Controls, reached an agreement with the legal office Cleary Gottlieb Steen & Hamilton LLP and the consultants White Oak Advisory LLP to assist the Icelandic authorities in removing capital controls. Attorney Lee Buchheit of Cleary Gottlieb Steen & Hamilton will direct the legal office's work on this project.   

Economics professor Anne Krueger of Johns Hopkins University, former deputy managing director of the International Monetary Fund, will also advise the Icelandic authorities, especially with regard to macroeconomic requirements for removal of capital controls and granting of exemptions. In addition, the investment bank JP Morgan will assist the government in connection with Iceland's sovereign credit rating. 

The engagement of these foreign advisors is part of the government's work to relieve the economy of capital controls, which is one of its most important tasks. Efforts are directed at finding an overall solution dealing with all aspects of the capital controls, including settlement of the estates in winding-up. As stated in the government's policy statement, it is crucial to ensure that settling the debts of failed financial undertakings does not threaten economic stability. The foreign advisors have already been acquainted with the strategy and preparations of the Icelandic government for removal of controls, including the report of the advisory group on the removal of capital controls and the Central Bank's analysis of the balance of payments. 

The Minister of Finance and Economic Affairs has engaged four experts to work with the above-mentioned advisors on behalf of the Steering Group. They are Benedikt Gíslason, advisor to the Minister of Finance and Economic Affairs on capital controls, Supreme Court attorney Eiríkur Svavarsson, Freyr Hermannsson, head of the Central Bank's treasury section, and Glenn Kim, who will lead the project. Glenn Kim has worked in the international financial sector for a quarter of a century. Since the financial recession Kim has, among other things, worked as special advisor to the German Ministry of Finance in connection with financial restructuring in the Eurozone.   

The project will be divided into several modules. One of the first tasks will be to set out the macroeconomic conditions considered necessary with regard to maintaining economic stability. White Oak Advisory and Anne Krueger will be key participants in this work.


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