Norges Bank’s Stress Test in Financial Stability 2/10 Compared with Banks’ Projections

Abstract

In autumn 2010, at the request of Finanstilsynet, seven Norwegian banks projected their capital adequacy based on Norges Bank’s macro scenarios in Financial Stability 2/10. A summary of the results was included in Risk Outlook Report 2011. This article compares the banks’ results with Norges Banks’ results. There is a somewhat greater difference between the banks’ loan loss projections and Norges Bank’s projections compared with a similar exercise conducted in 2005. The main conclusions from 2005 are still valid. The stress tests have not identified fundamental weaknesses in the Norwegian banking sector.