(Adds analyst comment, background)
By Ragnhildur Sigurdardottir
REYKJAVIK Aug 15 Iceland's Ministry of Finance
said on Friday it had renewed Mar Gudmundsson's mandate to lead
the Nordic country's central bank as governor for another five
Gudmundsson will play a key role in removing capital
controls put in place after the country's top banks collapsed
under a mountain of debt in 2008. He will also be involved in
deciding how to handle the estates of the old banks.
"I think this is positive news for the markets because the
central bank has been making good headway in terms of their
credibility - getting inflation under control and facilitating
more stability in the foreign exchange market," said
Islandsbanki senior economist Jon Bentsson.
"Changing the governor at this juncture with the lifting of
capital controls nearing us in time would probably have sent a
confusing message to both domestic and international markets."
(Additional reporting by Mia Shanley, writing by Sven
Nordenstam; Editing by Larry King)