Quotas in the system for the management of bank reserves
[NOT IN FORCE]
Under the current system for managing banks reserves, banks receive interest only on a specific portion of reserves – a quota – equivalent to the key policy rate. Deposits in excess of the quota bear lower interest – equivalent to the reserve rate. Norges Bank will normally assess the total quota and its distribution among banks twice annually.
The following applies from 1 October 2014:
- Norges Bank will seek to maintain reserves in the banking system at an average NOK 35 billion with a symmetrical interval ±5 billion around this level.
- The sum of banks' quotas, the total quota, is set at NOK 45 billion.
- The reserve rate is 100 basis points below the sight deposit rate.
Banks are divided into three groups where all banks in the same group are assigned the same quota, with the exception of settlement banks which are assigned higher quotas. The banks are divided into groups as follows (Table 1):
Table 1. Division of banks into groups (as of September 2014)
|Group 1:||Group 2:||
Group 3: All B-banks in NBO* (110 banks)
|DNB Bank ASA**||Sparebank 1 SR Bank|
|Nordea Bank Norge ASA||Sparebanken Vest|
|Danske Bank NUF||Sparebank 1 SMN**|
|Handelsbanken NUF||Sparebank 1 Nord-Norge|
|SEB AB NUF||Sparebanken Hedmark|
|Swedbank NUF||Sparebanken Møre|
|Storebrand Bank ASA|
|BNP Paribas Fortis SA/NV Norwegian Branch|
|BN Bank ASA|
|Skandiabanken AB NUF|
|Bank 1 Oslo Akershus|
*Norges Bank's settlement system, **Settlement Bank
The quotas that apply from 1 October 2014 are set on the basis of banks' total assets as at 30 June 2014. The quotas are distributed as follows (Table 2):
Table 2. Banks' quotas to be applied from 1 October 2014. In thousands of NOK
|Sum TA||Share TA||Sum quota per group||Number banks||Quota per bank|
|Group 1||2 831 154 616||65.9 %||29 668 358||6||4 900 000|
|Group 2||843 732 054||19.6 %||8 841 673||15||590 000|
|Group 3||619 316 582||14.4 %||6 489 969||110||59 000|
|Sum||4 294 203 252||100 %||45 000 000||131|
TA: Total assets
Settlement banks are assigned quotas as follows (Table 3):
Table 3. Quotas for settlement banks, DNB and SpareBank 1 SMN*. In thousands of NOK
|Initial quota||Supplement to quota||Sum quota|
|DNB Bank ASA||4 900 000||1 300 000||6 200 000|
|Sparebank 1 SMN||590 000||650 000||1 240 000|
*Settlement banks are assigned a supplementary quota determined by the size of the settlement bank in relation to the size of the B-banks or equivalent banks for which it executes settlements (as measured by total assets). If the estimated quota for the settlement bank is initially NOK K billion, its total assets NOK X billion and the sum of total assets of the B-banks is NOK Y billion, the settlement bank will be assigned a supplementary quota equal to K x (Y/X), but with an upper limit equal to the sum of the quotas for the B-banks for which it executes settlements. The settlement bank's total quota will normally be equal to K+K x (Y/X).
For a further description of the system for the management of bank reserves, see "Management of bank reserves: The system in Norway".
For a further discussion of the background for the new system, see Background for the system for the management of bank reserves in Norway.