Countercyclical capital buffer unchanged at 2.5 percent
At its meeting on 21 January 2026, Norges Bank's Monetary Policy and Financial Stability Committee decided to keep the countercyclical capital buffer rate unchanged at 2.5 percent.
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 is intended, in principle, to range between 0 percent and 2.5 percent. 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 percent. If cyclical vulnerabilities recede significantly over time and the outlook for financial stability is positive, the buffer rate may be reduced. Norges Bank sets the countercyclical capital buffer rate each quarter.
Continued heightened risk of events that could weaken financial stability
The outlook for the international economy remains highly uncertain. Geopolitical tensions have increased, and the US has threatened to raise tariffs on goods from Norway and seven other European countries that have had military personnel in Greenland. The announced tariff increases are likely to have a limited impact on the Norwegian economy, but an escalation of the trade conflict could amplify the effects on the Norwegian and international economy. Major equity indices have declined somewhat in recent days but remain at high levels, and risk premia have remained low.
In a global, interconnected financial system, shocks may quickly impact the Norwegian financial system, and the risk of events that could weaken financial stability remains heightened. 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 Q4, banks reported approximately unchanged credit standards and household and corporate credit demand. Banks also expect unchanged standards and demand in 2026 Q1. Bond market activity was high in 2025, mainly due to large volumes reaching maturity. Corporate credit spreads are close to the average for the past ten years. In Norges Bank’s overall assessment, households and firms have ample access to credit.
Household debt is rising less than 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).
Household credit growth increased somewhat through 2025, and the twelve-month rise was 4.5 percent in November. This increase followed a period of slower economic growth, and credit growth is still lower than in the pre-pandemic years. Credit growth is normally closely linked to house price inflation, which was high at the beginning of 2025 but has been more moderate since then.
When DTI ratios decline over time, the household sector becomes less vulnerable to interest rate increases and loss of income. This vulnerability may increase again if looser financial conditions result in rapidly rising house prices and debt.
Stable developments in commercial real estate, but real estate developers still face challenges
Overall, Norwegian firms are robust. Corporate credit growth was 2.2 percent in November. Credit growth slowed in 2025 H2 and is significantly below the average for the past ten years. Low corporate credit growth must be viewed in the light of weak developments in mainland business investment in recent years.
The share of bankruptcies among Norwegian firms has risen in recent years. In 2025, the overall share of bankruptcies was at approximately the same level as the average for the past decade. Bankruptcies in real estate development rose markedly in 2025, many of which were among real estate developers with high bank debt. Somewhat higher bank losses on exposures to real estate development are expected in 2026. In 2025 Q4, Regional Network contacts in construction expected activity levels to decline further in the quarters ahead. Expectations were more muted than in 2025 Q3, but some contacts also report plans to launch new housing construction projects this winter.
Banks' CRE exposures are high. Commercial property selling prices rose at the beginning of 2025 but have since remained flat. Stable developments in selling prices are expected in the coming years (see Financial Stability Report 2025 H2). In 2025, the transaction volume was low in the office segment but picked up in other segments. Most transactions in the market for prime real estate in Oslo in 2025 were unleveraged.
Financial system resilience is strong and must be maintained
Norwegian banks are highly profitable and satisfy capital and liquidity requirements by a solid margin. Bank losses remain low. The solvency stress test in Financial Stability Report 2025 H1 shows that banks can absorb large credit losses while maintaining lending.
The countercyclical capital buffer requirement strengthens financial system resilience. Norges Bank’s Monetary Policy and Financial Stability Committee considers the Norwegian financial system to be robust.
The Committee unanimously decided to keep the countercyclical capital buffer rate unchanged at 2.5 percent.
Ida Wolden Bache
Pål Longva
Øystein Børsum
Hilde C. Bjørnland
Steinar Holden
21 January 2026