How is market turbulence affecting Norwegian banking groups' funding costs?
- Jermund Molland and Monique Erard
- Economic Commentaries
Recent years' turbulence in financial markets has led to changes in funding conditions for Norwegian banking groups. Through 2008, risk premiums on banking groups' bond funding rose sharply. After falling back and stabilising somewhat, premiums rose again from summer 2011. As banking groups must replace bonds issued prior to 2008, the average cost of bond funding rises, pushing up banking groups' total funding costs.
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