Financial stability implies a financial system that is robust to disturbances and is capable of ensuring funding, executing payments and distributing risk efficiently. Experience shows that financial instability builds up in periods of strong credit growth and asset price inflation.
Norges Bank promotes financial stability through:
- Oversight of the financial system, analysing risk factors and assessing the financial stability outlook.
- Prevention, by providing advice about the formulation of regulations, exercising licensing authority for interbank systems, ensuring a reliable supply of cash and the secure operations of Norges Bank’s settlement system.
- Preparedness for the management of a crisis in the financial sector that could threaten financial stability.