Norway’s FSA Warns Banks to Plan for Turbulent Times Ahead

Norway’s banks need to ensure they have enough capital to handle the fallout that interest rate increases will have on highly-indebted households and lofty commercial property valuations, according to the country’s financial regulator.

“The Financial Supervisory Authority expects the banks to take into account in their capital planning that there is considerable uncertainty about economic developments,” Morten Baltzersen, director general of the FSA, said in a statement on Wednesday. “Good solvency is crucial for the banks’ ability to bear loan losses and provide loans to credit-worthy customers in times of recession,” he said.

Like most its Nordic peers, Norway ...