Norges Bank’s stress test in Financial Stability 2/10 compared with banks’ projections
Gøril B. Havro, Rønnaug Melle Johansen, Jørgen Ruud and Cathrine B. Træe.
In autumn 2010, at the request of Finanstilsynet, seven Norwegian banks projected their capital adequacy based on Norges Bank’s macro scenarios in Financial Stability 2/10. A summary of the results was included in Risk Outlook Report 2011. This article compares the banks’ results with Norges Banks’ results. There is a somewhat greater difference between the banks’ loan loss projections and Norges Bank’s projections compared with a similar exercise conducted in 2005. The main conclusions from 2005 are still valid. The stress tests have not identified fundamental weaknesses in the Norwegian banking sector.
(Article added 8 November 2011)
- Read the article (pdf, 425 kB)
Related articles published by Norges Bank:
- Norwegian version of the article, published in Penger og Kreditt 1/2011
- The IMF’s stress testing of the Norwegian financial sector (Economic Bulletin 4/2005) (pdf, 518 kB)
- Stress testing of banks’ profit and capital adequacy (Economic Bulletin 2/2008)
- Financial Stability Report 2/10