Countercyclical capital buffer rate unchanged at 2.5%
At its meeting on 4 November 2026, Norges Bank’s Monetary Policy and Financial Stability Committee decided to keep the countercyclical capital buffer rate unchanged at 2.5%.
About the countercyclical capital buffer
The countercyclical capital buffer is intended to strengthen banks’ solvency and mitigate the risk that banks amplify an economic downturn.
The countercyclical capital buffer rate is intended, in principle, to range between 0 and 2.5%. Norges Bank will normally set the buffer rate in the upper part of this range. If a downturn will or could cause a marked reduction in credit supply, the countercyclical capital buffer rate should be lowered. In the event of particularly high cyclical vulnerabilities, the countercyclical capital buffer rate may be set above 2.5%. If cyclical vulnerabilities recede significantly over time and the financial stability outlook is good, the buffer rate may be reduced. Norges Bank sets the countercyclical capital buffer rate each quarter.
Increased risk of serious events that could weaken financial stability
The balance of risks for the global economy is marked by geopolitical tensions, high and rising government debt in many countries and rapid developments in AI. The outlook for the global economy is highly uncertain, and the risk of serious incidents that could weaken financial stability has increased. In a global, interconnected financial system, new shocks may quickly impact the Norwegian financial system. Strong financial system resilience dampens the risk of vulnerabilities amplifying a downturn in the Norwegian economy and leading to bank losses.
Households and firms have ample access to credit
In Norges Bank’s Survey of Bank Lending for 2026 Q3, banks reported broadly unchanged credit standards, broadly unchanged household credit demand and slightly weaker corporate credit demand. In Q4, banks expect household credit demand to be broadly unchanged and corporate demand to decline slightly further. Bond market activity is at a normal level. Credit spreads for investment-grade firms increased somewhat in October but are close to the average for the past decade. In Norges Bank’s overall assessment, households and firms have ample access to credit.
Debt burdens have declined broadly across households
High and rapidly rising debt can amplify economic downturns and increase the risk of financial crises. Total household debt has risen less than income in recent years. Debt burdens have declined broadly across households and most for those with the highest debt-to-income (DTI) ratios (see Financial Stability Report 2026 H2). Looking ahead, household debt will rise broadly in pace with income.
Higher interest rates and high inflation tightened household finances in the years following the pandemic. However, most households have been able to service debt and cover necessary expenses with current earnings by a solid margin. Over the past two years, wages have risen more than prices. The debt servicing capacity and purchasing power of many households has improved, also when factoring in higher interest rates.
Following a period of increase since spring 2024, the 12-month rise in credit to households has remained stable at close to 4.6% so far in 2026. Household credit growth is still lower than in the pre-pandemic years. Credit growth is normally closely linked to housing market developments. After a period of moderate house price inflation and high turnover in the secondary housing market in autumn 2025, house price inflation has declined and been low in 2026. At the same time, there are wide regional differences. House price inflation has recently been particularly weak in the Oslo area but high in several other cities in Norway.
Higher interest rates put pressure on property values
Banks have high CRE exposures. Commercial property selling prices rose at the beginning of 2025 but have fallen back again in 2026. Developments in selling prices are expected to remain fairly flat in the coming years (see Financial Stability Report 2026 H2). Higher long-term interest rates are likely to push up CRE yields. Rising office vacancy rates are curbing the rise in rents, but few new office projects are expected to reach completion in the coming years, which will help sustain rents, particularly in central Oslo.
High construction and financing costs have dampened demand for new residential and commercial property in recent years and made conditions challenging for real estate developers. Bankruptcies have risen markedly, and a number of them have been among real estate developers with high bank debt. A number of Norges Bank’s Regional Network contacts point out that residential construction has troughed, but many report that the recovery keeps getting delayed. Even though several key financial figures improved last year, the current situation is weighing on the liquidity of many real estate developers, and continued low construction activity is expected to result in higher bank losses on real estate development exposures (see Financial Stability Report 2026 H2).
Resilient banks are key to financial stability
Norwegian banks are solid and satisfy capital and liquidity requirements by an ample margin. Overall, banks’ credit losses remain low, and banks are expected to continue to record low losses and strong profitability ahead. 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 resilient. 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
4 November 2026