Norges Bank

Circular 2/2019

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 1 March 2019:

  • 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 February 2019) 

Group 1: Group 2: Group 3: All B-banks in NBO* (105 banks)
DNB Bank ASA** SpareBank 1 SR-Bank ASA  
Nordea Bank Norge Abp, filial i Norge SpareBank 1 SMN**  
Danske Bank** Sparebanken Vest  
Handelsbanken SpareBank 1 Østlandet  
Skandinaviska Enskilda Banken AB (publ) Oslofilialen SpareBank 1 Nord-Norge  
Swedbank Norge Sparebanken Sør  
  Sbanken ASA  
  Sparebanken Møre  
  Sparebanken Sogn og Fjordane  
  Sparebanken Øst  
  BNBank ASA  
  Storebrand Bank ASA  
  Sandnes Sparebank  
  BNP Paribas S.A. Norway Branch  
  Citibank Europe PLC, Norway Branch  

* Norges Bank settlement system, ** Settlement bank

The quotas that apply as from 1 March 2019 are set on the basis of banks’ total assets as at 19 February 2019. The quotas are distributed as follows (Table 2).

Table 2. Banks’ quotas to be applied as from 1 March 2019. In thousands of NOK

  Sum TA Share TA

Sum quota per
group

Number banks Quota per bank
Group 1 3 305 574 793 63.9 % 28 746 672 6 4 800 000
Group 2 1 025 611 432 19.8 % 8 919 149 15 590 000
Group 3 843 355 937 16.3 % 7 334 179 105 70 000
Sum 5 174 542 162 100 % 45 000 000 126  

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

4 800 000

1 500 000

6 300 000

SpareBank 1 SMN

590 000

630 000

1 220 000

Danske Bank

4 800 000

100 000

4 900 000

*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 2019 10:00