Norges Bank’s Monetary Policy and Financial Stability Committee unanimously kept the countercyclical capital buffer requirement at 2.5% at its Nov. 4 meeting. The assessment identifies a higher risk of severe events that could weaken financial stability, citing geopolitical tensions, high and rising sovereign debt in many countries and rapid developments in artificial intelligence. Norwegian banks meet capital and liquidity requirements by wide margins, while households and businesses continue to have good access to credit.
Household debt burdens have declined in recent years, particularly among those with the highest burdens, and debt is expected to grow broadly in line with income. Commercial property prices, described as broadly flat in the August assessment, have fallen back in 2026. Higher long-term interest rates are expected to push up required returns on commercial property, to which banks have substantial exposure. High construction and financing costs continue to strain property developers, and prolonged weak construction activity is expected to increase banks’ losses on loans to the sector. Overall bank loan losses are nevertheless expected to remain low.