English

Legal framework

MCI is established on the basis of Act No. 150/2006 on the Incorporation of MCI as a Statutory Limited Liability Company and operates pursuant to Act No. 161/2002 on Financial Undertakings, cf. the Companies Act No. 2/1995. As a credit institution, MCI is supervised by the Financial Supervisory Authority of the Central Bank of Iceland and is bound by the Central Bank’s rules on minimum reserve requirements, liquidity ratio and foreign exchange balance.

Ownership

The share capital of the company is ISK 5,000,000,000. Shares may only be owned by Icelandic municipalities and organisations or enterprises wholly owned by them. MCI has 61 shareholders and is owned by all municipalities in Iceland. The City of Reykjavík is the largest shareholder with 17.5% of the total shares.

Lending and security

Loans to municipally owned enterprises and institutions are conditional on them being wholly owned by municipalities, or by municipalities and other public entities, with the municipalities guaranteeing the loans.

Under Article 68(2) of the Local Government Act No. 138/2011, a municipality may pledge its revenues to MCI as security for loans and guarantees, but for no other loans or guarantees. It is MCI’s policy that such security is provided, comprising the municipality’s income tax revenues and contributions from the Municipal Equalisation Fund. Since the start of operations in 1967, MCI has never suffered a loan loss.

Financial statements

Green bonds