Countercyclical capital buffer
Norges Bank has submitted its quarterly advice on the countercyclical buffer requirement for banks to the Ministry of Finance. The advice will be published when the Ministry has issued its decision. The decision basis for the advice is presented in the June 2014 Monetary Policy Report.
Indicators of financial imbalances are at high levels. In recent months, house prices have picked up again and there are signs of some easing of banks' credit standards for households.
"At present there is no basis for asserting that financial imbalances are building up further. Should house prices and debt accumulation accelerate, systemic risk may increase further out", says Governor Øystein Olsen
The countercyclical capital buffer requirement must also be viewed in the light of the overall requirements for banks. In May, DNB Bank and Nordea Bank Norge were designated as systemically important banks. The capital requirements for these banks will be increased further in the period to 2016.
"The large savings banks will, nonetheless, likely also have to adapt to the highest capital requirements. More capital will increase banks' resilience to future loan losses", says Governor Øystein Olsen.
The buffer rate was set at 1% in December, effective from 30 June 2015.
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