The persistent rise in household debt ratios and high property price inflation in recent years are signs that financial imbalances have built up. Property price inflation remains elevated, and household debt growth has risen slightly in recent months.

"Norges Bank's assessment of financial imbalances is little changed since June," says Governor Øystein Olsen.

In the period ahead, borrowing may be restrained by the new requirements for banks' residential mortgage lending and lower growth in the Norwegian economy. On the other hand, the decline in lending rates over the past year may entail a risk of further fuelling property price inflation and debt growth.

"Increased capital buffers strengthen banks' resilience to future loan losses," says Governor Olsen.

In June 2015, the buffer rate was set at 1.5 percent effective from 30 June 2016.

The Ministry of Finance has decided to keep the buffer requirement unchanged. See Ministry's press release: "Countercyclical buffer unchanged".

Norges Bank's letter: Advice on the countercyclical capital buffer 2015 Q3