General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
July 05, 2017

IMF published its staff report and selected issues report in the context of 2017 Article IV consultation with Norway. The assessment highlights that significant policy actions have been taken to address financial stability risks. However, vulnerabilities in the financial system have increased in the context of high and rising property prices and elevated household debt.

The staff report highlights that Norway has been well ahead of schedule in terms of implementing the CRD IV/Basel III requirements. The risk-weighted capital ratios of Norwegian banks have improved markedly since 2008, with all banks comfortably meeting Pillar 1 and Pillar 2 requirements and the upcoming leverage ratio requirements by ample margins. Bank stress tests by both the Financial Sector Assessment Program (FSAP) mission in 2015 and the Norges Bank in 2016 suggest that banks’ buffers render them well-positioned to withstand severe shocks. Important steps have been taken to cope with the build-up of financial imbalances, including recent decisions to raise the countercyclical capital buffer to 2% from December 31, 2017, tighten mortgage regulations (effective from 2017 to mid-2018), and introduce the debt-to-income limit and leverage ratio requirements of 5% (with an exception for DNB—the largest bank―at 6%) from June 30, 2017. The authorities have been vigilant about the key risks and have made important progress with implementing Article IV and FSAP recommendations.

 

The staff report points out that further efforts are needed to address several key FSAP recommendations that remain outstanding, including limiting banks’ wholesale funding including on the mismatch between the maturity of currency swaps and underlying exposures; enhancing the Financial Supervisory Authority of Norway’s (FSA) de jure operational independence; and strengthening the legal and institutional framework for crisis management, safety nets, and bank resolution. Moreover, Norway has been leading its European peers in the adoption and use of macro-prudential tools. In addition, the FSA has submitted a proposal―currently under consultation—to introduce liquidity coverage ratio requirements in significant currencies. The report also reveals that bank profitability declined slightly, partly due to a rise in loan provisions requested by the FSA, but remains high compared to peers. The nonperforming loan ratio edged up—reflecting losses on oil-related exposures―but stayed low.

 

The selected issues report examines various factors driving the uptrend in house prices; evaluates the key tax reform measures to identify the remaining gaps in the current tax system relative to the best practice; and discusses ways to support long-term growth in Norway through high-quality labor supply.

 

Related Links

Staff Report (PDF)

Selected Issues Report (PDF)

Keywords: Europe, Norway, IMF, Basel III, FSAP, CRD IV, Article IV, Banking

Related Articles
News

HKMA Decides to Maintain Countercyclical Capital Buffer at 2.5%

HKMA announced that, in accordance with the Banking (Capital) Rules, the countercyclical capital buffer (CCyB) ratio for Hong Kong remains at 2.5%.

April 16, 2019 WebPage Regulatory News
News

EP Approves Agreement on Package of CRD 5, CRR 2, BRRD 2, and SRMR 2

The European Parliament (EP) approved the final agreement on a package of reforms proposed by EC to strengthen the resilience and resolvability of European banks.

April 16, 2019 WebPage Regulatory News
News

FDIC Consults on Approach to Resolution Planning for IDIs

FDIC approved an Advance Notice of Proposed Rulemaking (ANPR) and is seeking comment on ways to tailor and improve its rule requiring certain insured depository institutions (IDIs) to submit resolution plans.

April 16, 2019 WebPage Regulatory News
News

EP Resolution on Proposal for Sovereign Bond Backed Securities

The European Parliament (EP) published adopted text on the proposal for a regulation of the European Parliament and of the Council on sovereign bond-backed securities (SBBS).

April 16, 2019 WebPage Regulatory News
News

PRA Seeks Input and Issues Specifications for Insurance Stress Tests

PRA announced that it will conduct an insurance stress test for the largest regulated life and general insurers from July to September 2019.

April 15, 2019 WebPage Regulatory News
News

PRA Finalizes Policy on Approach to Managing Climate Change Risks

PRA published the policy statement PS11/19, which contains final supervisory statement (SS3/19) on enhancing banks’ and insurers’ approaches to managing the financial risks from climate change (Appendix).

April 15, 2019 WebPage Regulatory News
News

EBA Single Rulebook Q&A: First Update for April 2019

EBA published answers to nine questions under the Single Rulebook question and answer (Q&A) updates for this week.

April 12, 2019 WebPage Regulatory News
News

EIOPA Statement on Application of Proportionality in SCR Supervision

EIOPA published a supervisory statement on the application of proportionality principle in the supervision of the Solvency Capital Requirement (SCR) calculated in accordance with the standard formula.

April 11, 2019 WebPage Regulatory News
News

FED Updates Form and Supplemental Instructions for FR Y-9C Reporting

FED updated the form and supplemental instructions for FR Y-9C reporting. FR Y-9C is used to collect data from domestic bank holding companies, savings and loan holding companies, U.S intermediate holding companies, and securities holding companies with total consolidated assets of USD 3 billion or more.

April 11, 2019 WebPage Regulatory News
News

OSFI Finalizes Guidelines on Liquidity Adequacy and NSFR Disclosures

OSFI published the final Liquidity Adequacy Requirements (LAR) guideline and the net stable funding ratio (NSFR) disclosure requirements guideline.

April 11, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2920