Central Bank of Iceland, Financial Stability 2006

According to the Central Bank of Iceland's Financial Stability report 2006, the overall findings of the previous report are unchanged, but more challenging waters clearly lie ahead.

Two main changes have occurred since the Financial Stability analysis was published a year ago. One has been intensified macroeconomic imbalances. The Central Bank has responded to inflationary pressures caused by surging demand with significant rises in its policy interest rate. The other turnaround was in the

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