The Norwegian Ministry of Finance has today adopted a regulation on the identification of systemically important financial institutions in Norway. This is a follow-up of the capital requirements legislation adopted by the Storting (the Norwegian Parliament) last year. The regulation stipulates that the Ministry of Finance as a general rule shall designate financial institutions with total assets corresponding to at least 10 per cent of Mainland Norway s GDP, or a share of the Norwegian lending market of at least 5 per cent, as systemically important. The Ministry has today notified DNB Bank ASA, Nordea Bank Norge ASA and Kommunalbanken AS of the Ministry s decision to designate these institutions as systemically important in Norway. These three institutions meet the objective criteria specified in the aforementioned regulation, and will therefore be subject to a separate capital buffer requirement for systemically important institutions from 1 July 2015.
Certain financial institutions are particularly important for the financial system and the economy. Such systemically important institutions shall fulfil a higher capital buffer requirement in order to reduce the probability of financial difficulties that may have serious negative consequences for the financial system and the real economy, says Minister of Finance Siv Jensen.
Pursuant to the capital requirements legislation adopted by the Storting in June last year, systemically important financial institutions shall fulfil a separate capital buffer requirement of 1 per cent CET1 capital from 1 July 2015 and 2 per cent from 1 July 2016. From 1 July 2016, when the new capital and buffer requirements for banks and other financial institutions have been fully phased-in, systemically important institutions shall fulfil a combined CET1 capital and buffer requirement of 12 per cent, while the combined requirement for other institutions will be 10 percent. In addition, all institutions shall fulfil a counter-cyclical capital buffer requirement of 1 per cent from 1 July 2015.
The Ministry of Finance has today adopted a regulation on the procedure and criteria for identifying and designating systemically important financial institutions in Norway. As a general rule, an institution shall be designated as systemically important if it has total assets corresponding to at least 10 per cent of Mainland Norway s GDP, or a share of the Norwegian lending market of at least 5 per cent. Institutions may also be designated as systemically important on the basis of, among other things, their size, scope of operations in Norway and other countries, complexity, role in the financial infrastructure and their interconnectedness with the rest of the financial system.