Regulatory Alerts2026-05-12
Added · Updated
Norwegian banks are well equipped to manage market stress and higher losses
Norges Bank’s Monetary Policy and Financial Stability Committee has decided to keep the countercyclical capital buffer unchanged at 2.5 percent and has advised the Ministry of Finance to maintain the systemic risk buffer at the current level of 4.5 percent. The Committee assesses that Norwegian banks satisfy capital and liquidity requirements by an ample margin and have sufficient liquidity reserves to cope with an extended period of severe stress in funding markets. The report notes that while a scenario with an abrupt increase in carbon prices could result in substantial bank losses, banks as a whole can absorb large losses. The Committee emphasizes that international regulatory work should explore simplifying the capital requirements framework without compromising financial system resilience.