Continued heightened risk of events that could weaken financial stability 

The balance of risks for the global economy is marked by geopolitical tensions and changes in global trade policy. The growth outlook for the international economy is highly uncertain, and the risk of unexpected events that could weaken financial stability is still higher than normal. In a global, interconnected financial system, new shocks may rapidly impact the Norwegian financial system. Financial system vulnerabilities could amplify a potential downturn in the Norwegian economy and lead to bank losses. 

Households and firms have ample access to credit 

In Norges Bank’s lending survey for 2025 Q3, banks reported unchanged credit standards, somewhat stronger household credit demand and slightly weaker corporate credit demand. Banks expect unchanged credit standards and demand in Q4. This autumn, bond market activity has been high, and credit premiums for investment grade firms are close to the average for the past decade. In Norges Bank’s overall assessment, households and firms have ample access to credit. 

Debt is rising less than income 

High and rapidly rising debt can amplify economic downturns and increase the risk of financial crises. According to Finanstilsynet's (Financial Supervisory Authority of Norway) residential mortgage lending survey for 2025, debt-to-income (DTI) ratios increased somewhat with new mortgages, and a higher share of new mortgages are issued with loan-to-value (LTV) ratios close to 90 percent. These developments reflect the increase in the Lending Regulations' maximum LTV ratio requirement at the turn of the year from 85 percent to 90 percent. At the same time, total household debt has risen less than income in recent years. In 2024, the rise in household disposable income was the sharpest in over a decade. DTI ratios have declined broadly across households and the most for those with the highest ratios (see Financial Stability Report 2025 H2). 

When DTI ratios decline over time, the household sector becomes less vulnerable to interest rate increases and loss of income. Vulnerabilities may increase again if looser financial conditions result in rapidly rising house prices and debt.    

Household credit growth has increased somewhat over the past year and was 4.4 percent in September. This increase followed a period of slower growth, and credit growth is still lower than in the pre-pandemic years. Credit growth is normally closely related to house price inflation, which was high at the beginning of 2025 but has since been moderate.  

Stable prospects for commercial real estate 

Following a pronounced decline through 2023, estimated commercial property selling prices rose slightly towards the end of 2024 as a result of higher rents. Selling prices rose further in 2025 Q1 without a corresponding increase in rents. Selling prices were unchanged in Q2 and Q3, and stable developments are expected in the coming years (see Financial Stability Report 2025 H2). Throughout 2025, equity-finance investors, such as insurance companies and pension funds, have had an impact on the transactions market.    

The share of bankruptcies among Norwegian firms has risen in recent years, reflecting a normalisation after an unusually low number of bankruptcies figures during the pandemic. Bankruptcy rates in most sectors are now at approximately the same level as the average for the past decade.  

However, bankruptcies in real estate development have risen markedly. Construction activity is low, and earnings have fallen. In Norges Bank's lending survey for 2025 Q3, half of banks report an increased risk of default and breach of the terms of loan covenants. Looking ahead, somewhat lower financing costs and higher house prices are likely to boost profitability in construction and may lead to more projects coming to fruition.  Somewhat higher bank losses on exposures to the construction sector are expected in the year ahead. 

Financial system resilience is strong and must be maintained 

In the post-pandemic years, the Norwegian financial system has proved resilient to higher interest rates and high inflation. Most households and firms have been able to service debt and cover normal expenses with current earnings. At the same time, Norwegian banks are highly profitable and satisfy capital and liquidity requirements by a solid margin. Although banks’ corporate credit losses have increased somewhat so far in 2025, they are still low.  The solvency stress test in Financial Stability Report 2025 H1 shows that banks can absorb large credit losses while still maintaining the capacity to lend.   

It is important to maintain the resilience of the financial system so that vulnerabilities do not amplify an economic downturn. The countercyclical capital buffer rate helps banks maintain this resilience.  

The Committee unanimously decided to keep the countercyclical capital buffer rate unchanged at 2.5 percent.  

Ida Wolden Bache 
Pål Longva 
Øystein Børsum 
Ingvild Almås 
Steinar Holden 

5 November 2025