From Reuters:
Norwegian banks may have to put aside more money to cover potential defaults by homeowners after the country’s financial watchdog said on Tuesday it was increasing the risk weighting for residential mortgages.
The financial supervisory authority, which had warned in February that such a rule might be introduced, has long been concerned about high household indebtedness in Norway.
“Finanstilsynet estimates that the requirements … will increase risk weights assigned to residential mortgage portfolios to around 20-25 percent compared with previous levels of 10-15 percent,” the FSA said in a statement.
Norwegian banks, which include DNB, must adopt the new rules by the end of this year, it said.
The announcement comes as the financial regulators of Norway, Sweden and Denmark are discussing harmonising requirements for banks.
The drum beats get louder and when the jawboning fails there’ll be nowhere else to turn…