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COVID-19 EU PolicyWatch

Database of national-level responses

Eurofound's COVID-19 EU PolicyWatch collates information on the responses of government and social partners to the crisis, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for case NO-2020-11/800 – measures in Norway

Countercyclical capital buffer is reduced

Motsyklisk kapitalbuffer settes ned

Country Norway , applies nationwide
Time period Open ended, started on 13 March 2020
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Access to finance
Author Aasmund Arup Seip, FAFO and Eurofound
Case created 27 April 2020 (updated 05 May 2020)

Background information

The Ministry of Finance has decided to follow Norges Bank's advice to reduce the countercyclical capital buffer requirement for banks from 2.5 to 1 per cent with immediate effect. In Norges Bank's estimation, there is a risk of a marked setback in the Norwegian economy as a result of the outbreak of the coronavirus. The buffer requirement is lowered to counteract a tightening of lending practices in the banks. The social partners have been consulted regularly during design and implementation of the measure.

Content of measure

Norges Bank’s Monetary Policy and Financial Stability Committee has decided to advise the Ministry of Finance to reduce the buffer rate to 1%. Norges Bank shall advice the Ministry of Finance on the level of the countercyclical capital buffer for banks. The countercyclical capital buffer rate is currently 2.5%. In recent weeks, there has been considerable financial market volatility.

The outbreak of coronavirus (COVID-19) and the measures to limit contagion will have a significant negative impact on growth in the Norwegian economy. There is substantial uncertainty about the duration and the consequences of the outbreak, with a risk of a pronounced economic downturn. Norwegian banks are solid. They have sufficient capital to absorb losses in the event of a severe downturn. A tightening of lending standards may, however, amplify the downturn in the economy. Against this background, the Committee has decided to advise the Ministry of Finance to reduce the buffer to 1% with immediate effect. The decision was unanimous.

Use of measure

No information to date.

Target groups

Workers Businesses Citizens
Does not apply to workers Sector specific set of companies
Does not apply to citizens

Actors and funding

Actors Funding
National government
No special funding required

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Consulted Consulted
Form Direct consultation outside a formal body Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

  • Social partners jointly
  • Main level of involvement: Unknown



Views and reactions

Social partners have been consulted regularly during design and implementation of the measure.

Sectors and occupations

    • Economic area Sector (NACE level 2)
      K - Financial And Insurance Activities K64 Financial service activities, except insurance and pension funding

This case is not occupation-specific.



Eurofound (2020), Countercyclical capital buffer is reduced, case NO-2020-11/800 (measures in Norway), COVID-19 EU PolicyWatch, Dublin,

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.