Circular: 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 – for the banks that are Norges Bank’s monetary policy counterparties. 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 April 2022:
- 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.
The monetary policy counterparties 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 December 2021)
|
Group 1: |
Group 2: |
Group 3: All monetary policy counterparties in group B in NBO* (97 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 |
|
|
|
BN Bank 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 April 2022 are set on the basis of banks’ total assets as of 31 December 2021. The quotas are distributed as follows (Table 2).
Table 2. Banks’ quotas to be applied as from 1 April 2022. In thousands of NOK
|
|
Sum TA |
Share TA |
Sum quota per group |
Number banks |
Quota per bank |
|
Group 1 |
3 864 598 535 |
63,0 % |
28 347 429 |
6 |
4 700 000 |
|
Group 2 |
1 249 016 205 |
20,4 % |
9 161 727 |
15 |
610 000 |
|
Group 3 |
1 021 224 945 |
16,6 % |
7 490 843 |
97 |
77 000 |
|
Sum |
6 134 839 685 |
100 % |
45 000 000 |
118 |
|
TA: Total assets
The settlement banks DNB, SpareBank 1 SMN, SpareBank 1 Nord-Norge and Danske Bank are assigned quotas as follows (Table 3).
Table 3. Quotas for settlement banks, DNB, SpareBank 1 SMN, SpareBank 1 Nord-Norge and Danske Bank*. In thousands of NOK
|
|
Initial quota |
Supplement to quota |
Sum quota |
|
DNB Bank ASA |
4 700 000 |
1 500 000 |
6 200 000 |
|
SpareBank 1 SMN |
610 000 |
660 000 |
1 270 000 |
|
SpareBank 1 Nord-Norge |
610 000 |
80 000 |
690 000 |
|
Danske Bank |
4 700 000 |
100 000 |
4 800 000 |
*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.