The international situation is marked by uncertainty

Geopolitical tension and ongoing military conflicts continue to create uncertainty about the outlook for the global economy and developments in financial markets. In a global, interconnected financial system, shocks may quickly impact the Norwegian financial system. Financial system vulnerabilities could amplify a downturn in the Norwegian economy and lead to higher bank losses.

Households and firms have ample access to credit

In Norges Bank's Survey of Bank Lending for 2026 Q2, banks reported a slight increase in household credit demand, while corporate demand remained broadly unchanged. Overall, banks reported broadly unchanged credit standards and expect approximately unchanged credit demand and credit standards in Q3. Credit premiums increased slightly for both financial and non-financial corporates following the outbreak of the conflict in the Middle East but have declined in recent months and are close to the average for the past ten years. Heightened uncertainty contributed to somewhat lower bond market activity last winter, but the market picked up again before summer. In Norges Bank’s overall assessment, households and firms have ample access to credit.

Household debt is rising at broadly the same pace as income

High and rapidly rising debt can amplify economic downturns and increase the risk of financial crises. In recent years, total household debt has risen less than income. Debt-to-income (DTI) ratios have declined broadly across households and most for those with the highest debt (see Financial Stability Report 2025 H2). If DTI ratios decline over time, the household sector will become less vulnerable to interest rate increases and loss of income. In recent quarters, the decline in DTI ratios has slowed, and debt is expected to increase broadly in pace with income ahead.

During the years following the pandemic, higher interest rates and high inflation tightened household finances. However, most households have been able to both service debt and cover normal living expenses with current earnings by a solid margin. Over the past two years, wage growth has outpaced inflation. This increases households’ purchasing power and improves their debt-servicing capacity, also when taking into account higher interest rates.

After rising since spring 2024, 12-month household credit growth has remained stable at around 4.7% so far in 2026. Household credit growth is still lower than in the pre-pandemic years. Non-interest-bearing credit card debt reached record levels through summer, while total consumer debt growth was at approximately the same level as in the corresponding period in 2025.

Credit growth is normally closely linked to housing market developments. House price inflation has slowed following a moderate period in autumn 2025. In July, seasonally adjusted house prices fell by 1.1%.  Turnover in the secondary housing market remains high, while activity in the primary housing market remains low.

Stable developments for commercial real estate, but still challenging conditions for real estate developers

Banks' CRE exposures are high. Commercial property selling prices rose at the beginning of 2025 but have since remained flat. Little change is expected in these prices ahead (see Financial Stability Report 2026 H1). Office vacancy rates have edged up over the past twelve months but are still low for the most attractive premises. Few new projects will be completed in the coming years, which will help sustain rents, particularly in central Oslo.

Higher interest rates and low construction activity have weighed on profitability and debt‑servicing capacity among real estate developers in recent years, and the number of bankruptcies has increased. Somewhat higher bank losses are expected on exposures to this sector (see Financial Stability Report 2026 H1).

Resilient banks are important for financial stability

Norwegian banks are highly profitable and satisfy capital and liquidity requirements by a solid margin. Bank losses are low. The solvency stress test in Financial Stability Report 2026 H1 shows that banks can absorb large credit losses while maintaining lending capacity.  

Norges Bank’s Monetary Policy and Financial Stability Committee considers the Norwegian financial system to be robust. The countercyclical capital buffer requirement strengthens financial system resilience. 

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

Ida Wolden Bache
Pål Longva
Øystein Børsum
Hilde C. Bjørnland
Steinar Holden

12 August 2026