Lögberg-Heimskringla - 15.10.2006, Side 8

David Jón Fuller
The latter half of the 19th century was a tumultu-ous time for Iceland.
The independence movement
was gaining strength, volcanic
eruptions and harsh weather
weighed heavily on farmers’
fortunes, and migration to
North America took place on
an unprecedented scale. It was
also a time when Icelanders
began to take steps to modern-
ize their nation. A part of that
process was the development
of Reykjavík into a town, and
ultimately a city.
One feature of any com-
mercial centre is banking, and
in 1885 Iceland’s parliament
passed a law outlining the for-
mation of a national bank. On 1
July 1886, Landsbanki Íslands
opened its doors.
That initial offi ce was mod-
est compared to what it later
grew into, says Ingólfur Guð-
mundsson, Managing Director
with the company. The location
was determined and the street,
originally named Bakarabrekka
(“Baker’s Hill”), was later re-
named Bankastræti, or Bank
Street. “The fi rst months, the
bank was open two days a
week, for two hours a day,”
says Ingólfur; “and sometimes,
they even forgot to open, be-
cause they were not too active.”
At that time, he adds, Reykja-
vík’s population was only a few
thousand people.
In 1889, it was decided to
build a new head offi ce. Dan-
ish architect Lorens Turens de-
signed the building, which was
located at 11 Austurstræti. The
building, made of concrete, was
completed in 1899, and cost half
of the bank’s reserve funds.
A fi re in 1915 completely
destroyed 11 buildings in Reyk-
javík, and damaged the bank’s
offi ce. “Only the walls and the
fl oors remained,” says Ingólfur,
“and for some years the bank
had various locations in Reyk-
javík.”
In 1924, it was decided
to rebuild, and state architect
Guðjón Samuelsson expanded
on the original plans, enlarging
the building on its original site,
where it remains to this day.
As well, says Ingólfur,
the bank decided to have two
young painters paint frescos in
the new headquarters.
The more well-known artist
was Jón Stefánsson, who cre-
ated a fresco inside the building
that depicted an Icelandic agri-
cultural scene, featuring Icelan-
dic horses, dogs and cows.
The second artist was one
who attained greater renown
later in life, Jóhannes Kjarval.
(Ingólfur adds that this year,
Kjarval would have celebrated
his 100th birthday.) His fresco
used many motifs from Icelan-
dic fi shing life, including the
old-fashioned rowboats, later
sailboats, and the more modern
trawlers, as well as the process
of making bakalá, or saltfi sh.
Kjarval lived across the
street from the bank, and
Landsbanki has over the years
bought many of his paintings.
“We are very fortunate to have
supported him,” says Ingólfur,
adding that Landsbanki contin-
ues to support artists, as well as
soccer teams and sporting clubs
all over Iceland.
For most of its history,
Landsbanki Íslands was state-
owned. It began as an institu-
tion to handle loans for Iceland-
ers and was also responsible for
issuing Iceland’s currency, the
króna, which it did until the
early 1960s. In 1957, it was
split into a central bank and a
state-owned commercial bank.
In 1961 the Central Bank of
Iceland became responsible for
issuing the country’s currency.
The following decades saw
the Icelandic króna experience
devaluation, with correspond-
ing infl ation in Iceland itself.
The process of privatiz-
ing Landsbanki began in 1986,
when the government of Ice-
land passed an act granting
deposit institutions increased
independence from the Central
Bank. The process continued in
various stages, and Landsbanki
Íslands became fully privatized
in 2003. It is now governed by
a Board of Directors, and the
Chairman is Björgólfur Guð-
mundsson.
Ingólfur Guðmundsson
started with the company in
marketing 20 years ago, before
becoming a branch manager
and later Managing Director
of Retail Banking. He says that
at times government politics
affected the bank’s policies,
and this did not always result
in smooth or successful opera-
tions.
Since privatizing, the bank
has pursued investments and
expanded its operations. Ice-
land’s stable political climate,
highly-educated workforce and
low unemployment make it at-
tractive to foreign investors.
As well, the bank has opened
8 • Lögberg-Heimskringla • 15 October 2006
LANDSBANKI ÍSLANDS CELEBRATES 120 YEARS
PHOTOS: DAVID JÓN FULLER
From left: Birna Hlín Káradóttir, Viktor Ólason, Jóhann Viðar
Ívarsson and Ólafur Þorsteinsson attended the Leif Eiríksson
Dinner in Edmonton in late September.
Iceland Naturally would like to congratulate Lögberg-Heimskringla
as it celebrates this milestone event of 120 years of publication
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Continued on page 12
Ingólfur Guðmundsson spoke
at the recent Icelandic Cana-
dian Chamber of Commerce
meeting in Edmonton.
Visit us on the web at http://www.lh-inc.ca