Norges Bank's advice on the countercyclical capital buffer is based on a broad set of qualitative and quantitative information. The European Systemic Risk Board (ESRB) recommends including a general indicator of systemic stress in the financial system in this decision basis. The composite...

After the Covid-19 pandemic broke out, the authorities have introduced a number of measures aimed at the business sector. Support has largely been given to the sectors hardest hit by the pandemic and measures to contain it. A considerable share of banks' loan customers in these sectors have...

Loans to non-financial firms are the main source of banks' losses. In order to assess credit risk, Norges Bank has long used models to assess firms' bankruptcy probability. However, the banks' credit losses are more closely linked to firms that default on their loans. Defaulting loans are only...