Household debt-to-income ratios remain high and property prices are high after rising rapidly for many years. However, household debt growth has slowed over the past two years and is now close to growth in disposable income. At the same time, house price inflation has been moderate. The sharp rise in CRE prices has abated in the past year. Slower debt growth and house price inflation may reflect banks’ lending requirements and the interest rate increases over the past year. Banks’ profitability is solid, losses are low and banks have ample access to wholesale funding.

"The assessment of financial imbalances has not changed substantially since the second quarter. Norges Bank has advised the Ministry of Finance to keep the countercyclical capital buffer at 2.5 percent from the end of 2019", says Governor Øystein Olsen.

The Ministry of Finance decided today to follow Norges Bank's advice.