A framework for advice on the countercyclical capital buffer
- Norges Bank Papers
The countercyclical capital buffer is a time-varying capital requirement for banks and one of the macroprudential instruments in Norway. The Ministry of Finance sets the buffer rate. Norges Bank is responsible for preparing a decision basis and advising the Ministry of Finance on the level of the buffer every quarter.
Prior to September 2021, the Ministry of Finance set the buffer, and Norges Bank was responsible for preparing a decision basis and advising the Ministry of Finance on the level of the buffer each quarter. This paper from 2019 was therefore formulated as a framework for Norges Bank’s advice. The paper will be updated to reflect Norges Bank’s assumption of decision-making responsibility.
The aim of this paper is to provide an updated, detailed description of the principles and information basis for Norges Bank’s advice on the countercyclical capital buffer. Compared with a similar paper from 2013 (Norges Bank Papers 1/2013), this updated paper contains a more elaborate description of the most important elements of the assessments on which a recommendation is based, both when the buffer is to be built up and when it is to be reduced.
Norges Bank Papers present the analyses and background supporting Norges Bank in the execution of its mandate.
ISSN 1894-0285 (print), ISSN 1894-0293 (online)