Norway raises countercyclical capital bank buffer

Sparebanken Sor

15/12/2016 09:01

OSLO, Dec 15 (Reuters) - Norway will increase its 
countercyclical capital buffer requirement for banks to 2.0 
percent from 1.5 percent, the finance ministry said in a 
statement on Thursday. 
    The decision was in line with a recommendation from the 
central bank, it added. 
    "In the Norwegian economy, high house price inflation and a 
continued rise in household debt ratios are signs that financial 
imbalances are building up further. House prices have risen 
sharply in recent months. High house prices could lead to 
increased household debt, and makes households more vulnerable," 
the ministry said. 
    The buffer, set by the ministry, forces banks to accumulate 
extra capital in periods of strong earnings on top of capital 
requirements set through other regulations. 
    The buffer can be unwound during downturns, enabling banks 
to continue lending and hence soften the impact of a recession. 
    Leading Norwegian banks include among others DNB  DNB.OL , 
SR Bank  SRBANK.OL , Sparebank 1 SMN  MING.OL , Sparebanken Vest 
 SVEG.OL  and Sparebank 1 Nord-Norge  NONG.OL . 
 
 (Reporting by Terje Solsvik) 
 ((terje.solsvik@thomsonreuters.com; +47 918 666 70; Reuters 
Messaging: terje.solsvik.thomsonreuters.com@reuters.net)) 
 
Keywords: NORWAY BANKS/FINMIN