Iceland's new PM launches central bank reform

By Kristin Arna Bragadottir

REYKJAVIK (Reuters) - Iceland's new Prime Minister Johanna Sigurdardottir announced plans on Monday for a revamped central bank with a different leadership.

A day after her new center-left government was formed, Sigurdardottir said she had written to the three governors of the bank, including former Prime Minister David Oddsson, about them leaving their posts soon.

A special parliamentary session is scheduled for Tuesday, although many Icelanders fear the interim government will have little time to do much for the shattered economy before elections on April 25.

"I have written a letter to the three bank managers of the central bank where I have requested that we would come to an agreement about their retirement as soon as possible," Sigurdardottir said on Icelandic television.

In a sign of her style of government, Sigurdardottir said Iceland would advertise for a single new central bank head. Opening up the field is in contrast to the image of cozy backroom deals that many had of the previous leadership.

Oddsson, Iceland's longest-serving prime minister before he was appointed to the central bank, was seen as a staunch ally of former Prime Minister Geir Haarde, who resigned last week in the face of public unrest.

Icelanders grew angry in the weeks that followed the collapse of the country's financial industry in October. No senior officials took responsibility for a crisis expected to push unemployment up to 11 percent in the coming year from about 1 percent previously.

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