Norges Bank

Circular 1/2017

Quotas in the system for the management of bank reserves

Under the current system for managing banks' reserves, interest is paid at the key policy rate on a certain portion of the reserves – a quota. Deposits in excess of the quota are remunerated at a lower rate – the reserve rate. Norges Bank will normally assess the total quota and its distribution among banks twice a year.

The following applies as from 3 April 2017:

  • Norges Bank will seek to maintain reserves in the banking system at an average NOK 35 billion with a symmetrical interval of ±5 billion around this level.
  • The sum of banks' quotas, the total quota, is set at NOK 45 billion.

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 March 2017)

Group 1: GROUP 2: GROUP 3: All B-banks in NBO* (106 banks)
DNB Bank ASA** Sparebanken Hedmark/Bank 1 Oslo Akershus AS  
Nordea Bank Norge AB (publ), filial i Norge BN Bank ASA  
Danske Bank NUF** BNP Paribas Fortis SA/NA Norway Branch  
Handelsbanken NUF Citibank Europe PLC, Norway Branch  
SEB AB NUF Sandnes Sparebank  
Swedbank NUF Skandiabanken ASA  
  SpareBank 1 Nord-Norge  
  SpareBank 1 SMN  
  SpareBank 1 SR-Bank  
  Sparebanken Møre  
  Sparebanken Sogn og Fjordane  
  Sparebanken Sør  
  Sparebanken Vest  
  Sparebanken Øst  
  Storebrand Bank ASA  

*Norges Bank's settlement system, **Settlement bank

The quotas that apply as from 3 April 2017 are set on the basis of banks' total assets as at 31 December 2016. The quotas are distributed as follows (Table 2):

Table 2. Banks' quotas to be applied as from 3 April 2017. In thousands of NOK

  Sum TA Share TA Sum quota per
Number banks Quota per bank
Group 1 3 252 777 075 66.4 % 29 878 767 6 5 000 000
Group 2 924 990 059 18.9 % 8 496 605 15 570 000
Group 3 721 195 656 14.7 % 6 624 628 106 62 000
Sum 4 898 962 790 100 % 45 000 000 127  

TA: Total assets

The settlement banks DNB, SpareBank 1 SMN and Danske Bank are assigned quotas as follows (Table 3):

Table 3. Quotas for settlement banks, DNB, SpareBank 1 SMN and Danske Bank*. In thousands of NOK

  Initial quota Supplement to quota Sum quota
DNB Bank ASA 5 000 000 1 200 000 6 200 000
SpareBank 1 SMN 570 000 600 000 1 170 000
Danske Bank 5 000 000 5 000 000

*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".

Published 1 March 2017 10:00