Norges Bank. Liquidity towards the banking system that is entire

Norges Bank can offer extraordinary liquidity to the complete bank operating system or specific banking institutions whenever usage of liquidity off their sources is reduced. The extraordinary liquidity that Norges Bank can offer may avoid economic issues from distributing and so avoid a wider crisis from arising.

Norges Bank provides additional liquidity to the bank system in the type of F-loans and D-loans. If the desired liquidity need is big, collateral demands may vary from those laid straight straight straight down into the legislation on the Access of Banking institutions to Borrowing and Deposit places in Norges Bank etc. (the “Lending Regulation”) for D-loans and F-loans (cf part 6 of this legislation).

Liquidity to banks that are individual crisis liquidity support (ELA)

Norges Bank can offer extraordinary liquidity to specific banking institutions if liquidity dilemmas are restricted to one or a couple of banking institutions. Norges Bank stretches credit on unique terms or crisis liquidity help (ELA) just in instances where stability that is financial at danger if such that loan isn’t extended. Norges Bank will then expand ELA to enhance liquidity (see Section 19, 3rd paragraph, for the Norges Bank Act).

Norges Bank sets needs for qualified security for ELA. The terms of an ELA is likewise determined on a person foundation, while the interest on such that loan will be above an ordinary market price.

Tips for trying to get credit on unique terms (ELA)

A software for an ELA must certanly be submitted to your Executive Director of Norges Bank Financial Stability.

The following information must be included with the loan application in addition to the desired loan amount and maturity

  1. A summary of this organization’s revenue and loss and stability sheet situation with updated money adequacy calculations in the application date, including COREP, the lender’s newest ICAAP and any feedback from Finanstilsynet (Financial Supervisory Authority of Norway) from the ICAAP (SREP). The financial institution must report whether its stability sheet and capital adequacy calculation in the application date happens to be evaluated by the outside or auditor that is internal. a declaration through the auditor, if any, needs to be connected.
  2. A summary of up-to-date projections associated with the bank’s expected income declaration and stability sheet budgets and associated money adequacy forecasted at the very least couple of years into the long term (divided into quarterly durations), with and without the disposals of assets and taking into consideration the requirement for alterations in loan impairments along with other facets impacting the income declaration, stability sheet and money adequacy, eg – feasible loss or earnings recognition on equity, fixed earnings and foreign currency jobs, increased capital costs and alterations in danger loads. See additionally aim 8.
  3. An agenda for recapitalising the financial institution and a forecast for money adequacy at the least couple of years in to the future beginning the application form date (divided in to quarterly durations) (see point 8). Information of other measures to boost money adequacy, including plans for dividend re re re re payments.
  4. The essential liquidity that is recent when it comes to bank, such as the LCR, NSFR and ALMM.
  5. An evaluation of just how long the bank’s present liquidity buffers lasts (excluding ELA) and all about the back ground for the bank’s liquidity dilemmas. A synopsis of maturities within the next 6 months of assets and liabilities, for a regular foundation for the initial a month as well as on a month-to-month foundation thereafter. A synopsis of maturities of assets which may be connected with considerable doubt on the next half a year.
  6. An general evaluation regarding the bank’s financing situation including the newest available ILAAP, and future maturities, excluding ELA.
  7. An evaluation of mark-to-market values of securities portfolios, including equities. Bigger banking institutions must provide an assessment also of derivatives/off-balance sheet portfolios. Things founded as hedges for stability sheet things should be evaluated combined with the balance sheet, while the evaluation must add gross and net exposures, with a step-by-step account of feasible dangers that the hedges will likely not work as thought.
  8. Disability of loans as well as other claims:
    1. A description of this bank’s procedures and routines for testing loans for disability, including disability of non-performing loans considering 30, 60 or ninety days’ delinquency together with criteria used by the financial institution for considering that loan become an issue loan, with associated evaluation of security values therefore the need certainly to recognise disability losings. In specific, the lender is required to reveal losses that are cumulative a portion of non-performing loans.
    2. The financial institution is required to report the full total level of non-performing and issue exposures within the business and retail client sections from the application date, and general specific disability losings and connected disability losings as a share of total financing in each category: non-performing – corporate, non-performing – retail, problem loans – corporate and issue loans – retail.
    3. The lender must report the level of collective disability losings in the date of application, the share of collective disability losings in accordance with gross loans less specific disability losings and provide an account of this assessments and quotes (including quotes according to models) that form the cornerstone for the size of collective disability losings.
    4. The lender must explain just exactly how alterations in disability losses on business and retail client exposures and expected losses or gains on equity, fixed earnings and currency exchange jobs affect the budgeted earnings declaration, stability sheet and money adequacy. The financial institution must make provision for an in depth account associated with the specific clients and specific impacts likely to be associated with the significance that is greatest in this respect.
    5. An evaluation for the bank’s 10 problem loans that are largest as well as its 10 biggest exposures, the latter no matter whether they truly are thought to be in danger.
    6. A description of situations employed by the lender for loss assessments/simulations.