Norway banks should raise mortgage default probability -regulator

OSLO Fri Feb 21, 2014 11:10am EST

OSLO Feb 21 (Reuters) - Norway's financial watchdog said on Friday it plans to tighten rules that govern how banks set probabilities of default for mortages, which may in turn force banks to increase the amount of money they set aside to deal with defaults by homeowners.

"(We are) considering measures that will in practice tighten the ... estimates necessary to have robust mortgage models," Norway's Financial Supervisory Authority said in a letter sent to the country's main banking lobby. (Reporting by Gwladys Fouche, editing by Terje Solsvik)