The Resolution Fund is intended to cover the cost of financial undertakings’ resolution proceedings if the need arises. The Fund ensures that resolution can take place effectively under various scenarios and conditions. It is a separate department of the Financial Institutions’ Insurance Fund (TIF). The Board of the Resolution Fund administers its activities, but the Central Bank of Iceland’s Resolution Authority takes decisions on payments from the Fund. 

The Resolution Fund was established with the passage of the Act on Resolution of Credit Institutions and Investment Firms, no. 70/2020, but the final decision on its financing was taken with the passage of Act no. 48/2022. In accordance with Directive 2014/59/EU, called the Bank Recovery and Resolution Directive (BRRD), each member state of the European Economic Area (EEA) is required to ensure that member states’ resolution funds have a balance of 1% of insured deposits by year-end 2027. Iceland’s Resolution Fund is already fully funded and therefore satisfies the requirements laid down in the Directive. The Resolution Fund’s total assets amounted to 29 b.kr. at the end of 2022.