Norges Banks vitenarkiv
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A framework for advice on the systemic risk buffer
Get PDFThe systemic risk buffer (SyRB) is a part of banks’ total capital requirements and one of the macroprudential instruments used in Norway. The SyRB is intended to increase banking system resilience by ensuring that banks hold a capital buffer based on the level of structural vulnerabilities in the financial system. The SyRB was introduced following the financial crisis as part of the EU/EEA capital framework (CRD IV and CRR) implemented in Norwegian law (Financial Institutions Act with regulations). In Norway, the SyRB was activated in 2013. The Ministry of Finance sets the SyRB rate. Norges Bank is responsible for preparing a decision basis and providing advice on the SyRB rate to the Ministry of Finance at least every other year.1 The decision basis is to contain analyses based on relevant indicators, recommendations and guidance from the European Systemic Risk Board (ESRB) and Norges Bank’s assessment of structural vulnerabilities and other systemic risks of a long-term nature. In this work, information and assessments are to be exchanged with Finanstilsynet (Financial Supervisory Authority of Norway). This paper describes the framework for Norges Bank’s advice on the SyRB and is organised as follows: Section B explains what the SyRB is and how it relates to other capital requirements. Section C describes the principles followed by Norges Bank when it provides advice on the SyRB rate. Section D provides a description of the information basis for Norges Bank’s advice on the SyRB rate. A detailed description of indicators is provided in the Appendix.publishedVersio
Higher policy rate will curb inflation
Get PDFIntroductory statement by Governor Ida Wolden Bache at press conference following announcement of the policy rate and publication of Monetary Policy Report 3/22publishedVersio
En noe raskere renteøkning
Get PDFSentralbanksjef Ida Wolden Bache holder foredrag på Arendalsuka, om de økonomiske utsiktene og rentebeslutningen.publishedVersio
Dividend Signaling and Bank Payouts in the Great Financial Crisis
Get PDFWe study the dividend payouts of U.S. banks during the 2008 financial crisis. Using a difference-in-differences methodology, we shows that banks with higher share of short-term liabilities to total liabilities, which were thus more exposed to the rollover crisis that took place in 2008, increased their dividend payouts relative to less exposed banks. This relative increase in dividend payouts is concentrated in relatively cash-rich banks. The dividend payout increase was associated with a short-run increase in stock valuations. We argue that this front-loading of dividends of more exposed banks is consistent with a theory of dividend payouts, in which the payout policy has a (short-run) stabilizing role on the bank’s liquidity position by signaling information to short-term lenders about the bank’s available liquidity.publishedVersio
Optimal capital adequacy ratio for Norwegian banks
Get PDFIn this paper, we analyse the appropriate capital adequacy ratio for banks from a socio-economic perspective. More equity capital in banks can contribute to financial stability by reducing the risk of costly banking crises, but lending may become more expensive if banks are required finance their assets with more equity. When assessing optimal capital adequacy ratios, the economic costs of more expensive credit must therefore be weighed against the benefits of fewer and less costly banking crises. Our calculations take into account recent changes in bank capital regulation. The results indicate that Norwegian banks should have a Common Equity Tier 1 (CET1) ratio of between 12 and 19 percent. The current CET1 ratio of around 18 percent is in line with this. Our estimates are consistent with results from international studies, but estimates vary considerably with changes in uncertain assumptions. However, banks’ capital needs during the banking crisis in the beginning of the 1990s show that such estimates are not unreasonable.publishedVersio
Norges Banks oppgjørssystem : Årsrapport 2021
Get PDFFormålet med Norges Banks oppgjørssystem (NBO) er å gjennomføre sikre og effektive oppgjør av betalinger mellom banker som har konto i Norges Bank. Årsrapporten omhandler hovedaktiviteter og tiltak for å ivareta formålet.publishedVersio
Norges Banks forvaltning av Statens pensjonsfond utland
Get PDFSentralbanksjef Ida Wolden Bache. Innledning til høring om Statens pensjonsfond i Stortingets finanskomitépublishedVersio
Economic perspectives
Get PDFAddress by Governor Ida Wolden Bache to foreign embassy representatives in Oslo, 31 March 2022.publishedVersio
The neutral real interest rate: An updated view of r*
Get PDFThe neutral real rate of interest (r*) is a key variable for assessing the tightness of monetary policy. The neutral real interest rate has by all accounts fallen substantially over the past three decades, amid slowing productivity growth, an ageing population, increased inequality and increased demand for safe and liquid assets along with lower investment demand. Updated model estimates and long-term market rates support Norges Bank’s assessment that the neutral real money market rate lays between -0.5 and 0.5 percent. Going forward, a further rise in life expectancy might suggest a continued very low r*, while increased public investment in defence and the climate transition, as well as the phasing out of asset purchase programmes by the large central banks may pull up on r*.publishedVersio