Norges Bank Financial Stability Report: Norwegian banks well-positioned to handle market stress

Norwegian banks are well-prepared to deal with market stress and higher losses, according to the Financial Stability Report – 2023 H1 by Norges Bank. The report identifies key vulnerabilities and risks in the financial system, including high inflation, geopolitical tensions, and uncertainty in real estate market developments. While problems at some foreign banks have led to market turbulence, Norwegian banks remain profitable and liquid, with solid capital buffers to absorb losses. However, the report highlights the potential impact on bank funding and borrowing for households and firms, and the uncertainty in the commercial real estate sector.