Financial imbalances have built up over a long period. Household debt is still growing faster than income, but the pace of growth has recently slowed somewhat. Corporate credit growth remains elevated and is higher than the rate of growth in the economy. After rising rapidly for a long period, house prices are at historically high levels. Over the past two years, house prices have risen less than household disposable income. In the commercial real estate market, the rapid rise in prices has slowed somewhat. Bank profitability is solid and losses are low, and banks have ample access to wholesale funding.

"The assessment of financial imbalances has not changed substantially since the preceding quarter. Norges Bank has advised the Ministry of Finance to keep the countercyclical capital buffer at 2.5 percent from the end of 2019", says Governor Øystein Olsen.

The Ministry of Finance decided today to follow Norges Bank's advice