Norges Bank has published its semiannual financial stability report, concluding that the Norwegian financial system remains robust despite heightened geopolitical uncertainty, the risk of sharp market movements and greater exposure to cyber and other operational disruptions. Its Committee on Monetary Policy and Financial Stability said Norwegian banks are well placed to cope with market stress and higher losses and left the countercyclical capital buffer unchanged. The report says the war in the Middle East has led to large movements in energy and financial markets and increased uncertainty about the economic outlook, raising the risk of turbulence spilling over to Norway. It also points to a more interconnected and complex financial system, including potential vulnerabilities linked to non-bank financial institutions, although Norges Bank does not currently see their role in Norwegian credit provision as a financial stability risk. Norwegian banks continue to meet capital and liquidity requirements with good margins, have satisfactory access to deposit and market funding, and hold sufficient liquidity reserves to withstand a prolonged period of severe financial market stress. Scenario analysis also indicates that a sharp rise in carbon prices and new climate requirements could cause significant bank losses, although the banking sector as a whole could absorb large losses and a reduction in capital buffer requirements in such a scenario would give banks more room to maintain lending in a deep downturn. The committee decided to keep the countercyclical capital buffer requirement at 2.5 percent and advised the Ministry of Finance to maintain the systemic risk buffer at 4.5 percent. It also highlighted international discussions on simplifying capital requirements and reporting, while cautioning that any simplification should not come at the expense of financial system resilience.
Norges Bank 2026-05-12
Norges Bank judges the Norwegian financial system robust and keeps the countercyclical capital buffer at 2.5 percent
Norges Bank’s semiannual financial stability report finds the Norwegian financial system remains robust despite geopolitical uncertainty, market volatility risks, and increased cyber and operational vulnerabilities, with banks well placed to handle stress and higher losses. The Committee on Monetary Policy and Financial Stability kept the countercyclical capital buffer at 2.5 percent and advised maintaining the systemic risk buffer at 4.5 percent, while warning that climate-related shocks and vulnerabilities in non-bank financial institutions require close monitoring. It also noted international discussions on simplifying capital requirements and reporting, stressing that simplification must not weaken resilience.