Norway tweaks banking capital rules, hopes to boost competition (updated)
06/12/2024 06:28
(Adds quote, detail in paragraphs 2-4)
OSLO, Dec 6 (Reuters) - Norway said on Friday it would
set lower and more risk-sensitive capital requirements for
residential and commercial property loans provided by smaller
banks, to give the country's lenders more similar regulations.
"Bank customers are the winners when we now have more equal
and better capital requirements... This can also contribute to
more effective competition in the banking market," Finance
Minister Trygve Slagsvold Vedum said in a statement.
The new method for calculating capital requirements for
small and medium-sized banks takes greater account of the
loan-to-value ratio of the loan and the type of business to
which it is lent, the finance ministry said.
For the larger banks that use internal risk models, the
ministry said it had increased the so-called risk weight floor
for mortgages to 25% from 20%, in line with a recommendation
from Norway's financial industry regulator.
(Reporting by Terje Solsvik, editing by Anna Ringstrom)
((terje.solsvik@thomsonreuters.com; +47 918 666 70;))