Norges Bank

Circular 4/2023

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 2 October 2023:

  • 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 June 2023) 

Group 1:                                                        

Group 2:

Group 3: All monetary policy counterparties in group B in NBO* (91 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

 

 

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 2 October 2023 are set on the basis of banks’ total assets as of 30 June 2023. The quotas are distributed as follows (Table 2).

Table 2. Banks’ quotas to be applied as from 2 October 2023. In thousands of NOK

 

Sum TA

Share TA

Sum quota per group

Number banks

Quota per bank

Group 1

4 687 696 501

65,5 %

29 466 944

6

4 900 000

Group 2

1 400 834 169

19,6 %

8 805 669

14

630 000

Group 3

1 070 214 428

14,9 %

6 727 387

91

74 000

Sum

7 158 745 098

100 %

45 000 000

111

 

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

4 900 000

1 200 000

6 100 000

SpareBank 1 SMN

630 000

520 000

1 150 000

SpareBank 1 Nord-Norge

630 000

70 000

700 000

Danske Bank

4 900 000

100 000

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 September 2023 10:00