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Monetary Policy Report with financial stability assessment 1/17
Get PDFThe Monetary Policy Report with financial stability assessment 1/17 appears in a new format. The projections for the key policy rate are presented in Section 1 of the Report. The Report is published four times a year, in March, June, September and December. The Report assesses the interest rate outlook and forms the basis for Norges Bank’s advice on the level of the countercyclical capital buffer. The Report includes projections of developments in the Norwegian economy. At the Executive Board meeting on 8 March 2017, the economic outlook, the monetary policy stance and the need for a countercyclical capital buffer for banks were discussed. On the basis of that discussion and the advice of Norges Bank’s executive management, the Executive Board made its decision on the key policy rate at its meeting on 14 March 2017. The Executive Board also approved Norges Bank’s advice to the Ministry of Finance on the level of the countercyclical capital buffer. The Executive Board’s assessment of the economic outlook and monetary policy strategy is provided in “The Executive Board’s assessment”. The advice on the level of the countercyclical capital buffer is submitted to the Ministry of Finance in connection with the publication of the Report. The advice is made public when the Ministry of Finance has made its decision
Comparing Behavioural Heterogeneity Across Asset Classes
Get PDFWe estimate a generic agent-based model in which agents have heterogeneous beliefs about the future price to see to what extent behaviour differs across assets, and what this implies for market stability. We find evidence for behavioural heterogeneity for all asset classes, except for equities. Heterogeneity is especially pronounced for macro-economic variables. Agents update their beliefs frequently in financial markets, and only gradually in the case of macro-economic variables. Consequently, we find that the probability of behavioural bubbles is substantially higher for the macro-economic variables than for financial assets.publishedVersio
Retail Payment Services 2016
Get PDFThe strong growth in payment card use continued in 2016. Growth in the use of international payment cards was particularly strong, reflecting a sharp increase in payments over the internet and in the use of mobile payment solutions. The average number of card transactions per inhabitant in 2016 was 417. The average value of card transactions was NOK 408. There was a further decline in the use of the cash infrastructure, such as ATMs and cash-back.publishedVersio
Financial Imbalances, Crisis Probability and Monetary Policy in Norway
Get PDFWe assess the strength of the impact of a monetary policy shock on financial crisis probability in Norway. Policy effects go via the interest rate impact on credit, house prices and banks’ wholesale funding. We find that the impact of a monetary policy shock on crisis probability is about 10 times larger than what previous studies suggest. The large impact is mostly due to a fall in property prices and banks’ wholesale funding in response to a contractionary monetary policy shock. In contrast, and in line with existing literature, there is a more limited contribution to reduced crisis probability from the impact of monetary policy on credit.publishedVersio
Components of Uncertainty
Get PDFUncertainty is acknowledged to be a source of economic fluctuations. But, does the type of uncertainty matter for the economy's response to an uncertainty shock? This paper offers a novel identification strategy to disentangle different types of uncertainty. It uses machine learning techniques to classify different types of news instead of specifying a set of keywords. It is found that, depending on its source, the effects of uncertainty on macroeconomic variable may differ. I find that both good (expansionary effect) and bad (contractionary effect) types of uncertainty exist.publishedVersio
Norwegian Interbank Market’s Response to Changes in Liquidity Policy
Get PDFWe investigate pricing and activity in the Norwegian unsecured overnight interbank market in response to a shift in the central bank's liquidity policy. In October 2011, to encourage interbank trading, banks were allotted quotas for their overnight deposits with remuneration at the key policy rate while that on overnight deposits beyond allotted quotas was set one percentage point lower. In addition, a target range for banks' total overnight deposits was introduced and supported by open market operations to counteract not only temporary liquidity shortfalls, but also surpluses. We document substantially higher interbank trading, lower interbank interest rates relative to the policy rate as well as lower interest rate volatility following the policy shift. Notably, while overnight interbank interest rates were generally above the key policy rate before the policy shift, they have been close to but generally below the key policy rate afterwards.publishedVersio
Finansiell infrastruktur 2017
Get PDFRapporten Finansiell infrastruktur er en del av Norges Banks arbeid for å fremme finansiell stabilitet og et effektivt betalingssystem. Hovedstyret drøftet innholdet i rapporten 3. mai 2017. Statistikk for utviklingstrekk i kunderettet betalingsformidling er publisert i Norges Bank Memo 2/2017.publishedVersio
Norges Bank’s BEER Models for the Norwegian Effective Exchange Rate
Get PDFI revisit Norges Bank’s Behavioural Equilibrium Exchange Rate (BEER) models for the Norwegian effective exchange rate first introduced in Flatner et al. (2010) and extend the model framework in several directions. Two medium-term BEER models are estimated using both short- and long-term interest rate differentials, where the latter intends to capture the effects of unconventional monetary policy. Both models include the oil price, relative consumer prices and a measure for the Norwegian “basic balance”, an approximation of Mainland Norway’s current account. Moreover, the short-term BEER model is extended with a long-term interest rate differential and a measure of Norwegian specific foreign exchange volatility. I show that the movements in the effective exchange rate can be explained quite well by the fundamental explanatory variables in the model framework
Endringer i bankreguleringen etter finanskrisen i 2008
Get PDFDen globale finanskrisen i 2008 utløste omfattende endringer i reguleringen av finansiell sektor. I denne aktuelle kommentaren gjennomgår vi de viktigste endringene i reguleringen av bankene. Bankene har blitt mer solide og likvide. Regelverksendringer har gjort at myndighetene nå er i bedre stand til å håndtere fremtidige bankkriser. Finanskrisen førte også til endringer i regnskapsreglene. Vi kommenterer også kort pågående arbeid med bankregulering.publishedVersio