Norway's key challenge is to get the right balance of support for recovery and adjustment until the crisis is firmly in its past. The authorities intend to continue exceptional policy support into 2021, adjusted to reflect the rebound in economic activity and pace of vaccinations in the second...

Much of the work of the FSAP was conducted prior to the COVID-19 outbreak. The risk and vulnerability analysis integrates the original work with a quantification of the impact of the COVID-19 crisis on bank solvency under two separate scenarios. The original 'market shock' scenario explores...

While Norway's institutional arrangement for macroprudential policy is uncommon, the authorities have shown strong willingness to act. The Ministry of Finance (MoF) is the sole macroprudential decision-maker in Norway, which is rare in international comparison. However, Norges Bank and the...

Norwegian banks and other financial institutions rely heavily on capital markets for liquidity and risk management. Liquidity conditions in the Norwegian financial sector are affected by central bank operations and the lending and funding activities of financial institutions, both domestically...

The Norwegian insurance sector is well-capitalized. In recent years, the authorities have taken steps to recapitalize weak insurers and to boost capital for the overall industry. Risk-resilience has been strengthened by stronger retention of profits leading to accumulation of reserves, better...

The Norwegian financial system has a long history of incorporating new technology. Norway is at the forefront of digitization and has tight interdependencies within its financial system, making it particularly vulnerable to evolving cyber threats. Norway is increasingly a cashless society, with...

Norway has made substantial progress in strengthening its framework for financial crisis management and bank safety nets since the 2015 FSAP. The Norwegian authorities have implemented the EU framework. The Bank Recovery and Resolution Directive (BRRD) has been transposed into the Norwegian...