September 20, 2018 / 8:09 AM / in 3 months

Norway keeps countercyclical capital buffer for banks unchanged

OSLO, Sept 20 (Reuters) - Norway will maintain its countercyclical capital buffer requirement for banks at the current level, the finance ministry said in a statement on Thursday.

The decision was in line with the recommendation from the central bank.

In December 2016, the ministry decided that banks should hold a countercyclical buffer of 2.0 percent by the end of 2017, an increase from 1.5 percent.

The buffer, set by the ministry, aims to force banks to accumulate extra capital during boom periods on top of capital requirements set through other regulations.

The buffer can be unwound during downturns, enabling banks to continue lending and hence soften the impact of a recession.

Leading Norwegian banks include among others DNB, SR Bank, Sparebank 1 SMN, Sparebanken Vest and Sparebank 1 Nord-Norge. (Reporting by Oslo newsroom)

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