Norges Bank

Financial Stability Report

Financial Stability Report 2020: vulnerabilities and risks

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Financial Stability Report 2020 - in brief

Support measures have helped to dampen the consequences of the pandemic

The Norwegian financial system has weathered the Covid-19 pandemic well. Government support measures have dampened the economic impact. Norges Bank implemented extraordinary measures to support well-functioning markets.

Uncertainty about the outlook is high

New shocks may occur, both in Norway and globally. A banking sector that remains robust contributes to resilience. Overall, the financial stability outlook is somewhat weakened.

Vulnerabilities from debt and property prices not substantially changed

High household debt and high residential and commercial property
prices are the key financial system vulnerabilities in Norway. In Norges Bank’s assessment, these vulnerabilities have not changed substantially over the past year.

The pandemic has affected many companies

The Covid-19 pandemic has reduced the earnings of a number of Norwegian firms. The industries hardest hit by the crisis account for a
small share of banks’ total lending. If the crisis persists and commercial property prices fall sharply, banks’ losses may be substantial.

Norwegian banks are solid

New regulations following the global financial crisis have strengthened the financial system. Norwegian banks are solid and have ample access to funding. Stress tests indicate that banks will be able to absorb higher credit losses.


Related information:

Press release: Resilient financial system, but uncertainty is high

Coverimage of the publication Financial Stability Report 2020: vulnerabilities and risks

In its bi-annual Financial Stability Report, Norges Bank assesses the financial stability outlook. The Report discusses cyclical and structural developments in financial markets, the Norwegian economy, banks and other financial institutions. Assessments of the countercyclical capital buffer and other recommendations for measures to safeguard financial stability are made on the basis of vulnerabilities, risks and resilience in the financial system. See all Financial stability reports

ISSN 1503-8858 (online).

Published 10 November 2020 10:00
Published 10 November 2020 10:00