Reciprocation of the Norwegian systemic risk buffer

Supervision consultation
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Published: 01 June 2023

The ESRB has recommended the reciprocation of an extended macroprudential measure taken by the Norwegian Finansdepartementet. DNB intends to reciprocate this measure in order to prevent the materialization of negative cross-border effects in the form of leakages and regulatory arbitrage.

Details of the measure

The extended measure consists of a systemic risk buffer requirement with a 4,5% rate for exposures in Norway. The extended measure is subject to a lower materiality threshold compared to the initially introduced measure in 2021. The lower materiality threshold ensures avoiding potential leakages as well as regulatory arbitrage and thus preserves financial stability.

Applicability of the measure

As a result of reciprocation, this measure would apply to the relevant exposures of branches of Dutch credit institutions in Norway and to relevant cross-border exposures of Dutch credit institutions to Norway. An institution-specific threshold of NOK 5 billion of risk-weighted exposures, that is EUR 458 million, applies. The measure becomes binding when credit institutions’ relevant exposures through branches and direct cross-border exposures exceed this threshold. The Norwegian measure is applied under Article 133 of Directive 2013/36/EU (CRD).

Responding to the consultation

Interested parties are invited to respond until 1 July 2023 and raise, for instance, possible issues with respect to the implementation and application of the measure. During the consultation period, responses can be sent to: consultatie-reciprociteit@dnb.nl. A reaction to the consultation will be made public, unless stated otherwise by the respondent.

Additional information

For more information about reciprocity and measures reciprocated by DNB, click here.

For more information on the measure and the ESRB recommendation to reciprocate it, click here.

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