Financial Stability Report 2024 H1

Financial stability assessment

The Monetary Policy and Financial Stability Committee considers that the financial stability outlook has not materially changed since the November 2023 Financial Stability Report. The Norwegian financial system is robust, but there is still uncertainty about the economic outlook and market developments. It is important to maintain the resilience of the financial system so that vulnerabilities do not amplify an economic downturn.

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In a nutshell

Most households and firms have been able to service debt so far, but uncertainty persists
Banks are solid and can withstand large deposit withdrawals
Climate transition may inflict losses on banks

The Report - In a nutshell →

Risks, vulnerabilities and resilience

Section 1

So far, most households and firms have been able to service their debt in the face of higher interest rates and high inflation. At the same time, there is considerable uncertainty about the economic outlook and future market developments, not least as geopolitical tensions persist. Many households are highly indebted, and they are vulnerable if an economic downturn were to occur.

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Bank earnings and solvency

Section 2

The Norwegian financial system is strong. High earnings, efficient operations and solid buffers ensure that banks are resilient. Norges Bank’s stress test shows that banks can still lend even if losses were to increase substantially owing to an economic downturn. Unchanged capital buffer requirements for banks contribute to maintaining resilience.

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Liquidity and funding

Section 3

Confidence in banks is fundamental to stable deposits. Norges Bank has conducted a stress test where confidence in banks was put to the test as a result of a cyberattack. The test shows that Norwegian banks can withstand large withdrawals of deposits by customers following such an incident. Sound contingency planning helps strengthen banks’ resilience.

Read section 3