Norway: Financial Sector Assessment Program-Technical Note-Systemic Liquidity
IMF Staff Country Reports, August 12, 2020
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- Norway: Financial Sector Assessment Program-Technical Note-Systemic Liquidity
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Bibliographic details
- Published: August 12, 2020
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513553177.002
Overview
- 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 and abroad.
- The note analyzes core funding markets for Norwegian banks and assesses Norges Bank’s capacity to manage systemic liquidity conditions and counteract liquidity shocks in normal times and in times of stress.
Funding structure and market reliance
- Nearly 40 percent of the funding of Norwegian banks is obtained from market sources.
- Market funding instruments include commercial paper, covered bonds, and senior unsecured bonds issued both domestically and abroad.
- Critical markets for credit intermediation:
- Money markets
- Foreign exchange (FX) swap markets
- Bond markets
Market vulnerabilities and systemic risk
- A dislocation in money markets, FX swap markets, or bond markets — the inability of financial institutions to roll over, or obtain new, funding — could have significant consequences for financial stability.
- The note focuses on implications of such dislocations for the credit intermediation process and broader systemic liquidity.
Norges Bank capacity and liquidity management
- The assessment covers Norges Bank’s capacity to manage systemic liquidity conditions and to counteract liquidity shocks in:
- Normal times
- Times of stress
- Central bank operations are identified as a key determinant of liquidity conditions in the financial sector.
Publication metadata and identifiers
- Pages: 43
- Volume: 2020
- Issue: 264
- Series: Country Report No. 2020/264
- DOI: https://doi.org/10.5089/9781513553177.002
- Stock No: 1NOREA2020006
- ISBN: 9781513553177
- ISSN: 1934-7685
- Subject keywords: Asset and liability management, Banking, Collateral, Covered bonds, Currency swaps, Financial institutions, Foreign exchange, Liquidity, Sovereign bonds
- Keywords: central bank, Collateral, commercial paper, Covered bonds, CR, cross holdings, Currency swaps, FX swap market, Global, government bond, government bond market, ISCR, Liquidity, liquidity support, market development, mortgage loan, secondary market, Sovereign bonds, spot market, U.S. dollar
International Monetary Fund. Monetary and Capital Markets Department "Norway: Financial Sector Assessment Program-Technical Note-Systemic Liquidity", IMF Staff Country Reports 2020, 264 (2020), accessed 9/10/2026, https://doi.org/10.5089/9781513553177.002.
Content in this bundle
- 1norea2020006