Banks are key actors in the financial system. Supervision of the banking and financial sector promotes solid financial institutions with good risk awareness, management and control. Finanstilsynet conducts both on-site inspections and off-site supervision (document based).
Banks under supervision
Finanstilsynet's registry gives a complete overview of undertakings licensed to carry on banking, and any other business normally carried on by a bank, in Norway. In 2011 this included 111 saving banks and 19 commercial banks.
Norwegian branches of banks with their head office in another EEA state are primarily supervised by the supervisory authorities of the country in which their head office is situated.
On-site inspections are important in identifying problem areas in individual banks so that a dialogue can be started with the management team and board of directors at the earliest possible stage. Finanstilsynet applies a risk-based supervisory methodology based on international supervisory standards.
- Market risk module - evaluation of market risk level (pdf)
- Market risk module - evaluation of management and control (pdf)
- Credit risk module - evaluation of management and control (pdf)
- Credit risk module - evaluation of exposure: under review. An updated version of this sub-module will be available at a later date
- Liquidity risk module - evaluation of liquidity risk level (pdf)
- Liquidity risk module - evaluation of management and control (pdf)
- Operational risk module - evaluation of management and control and exposure (pdf)
Banks are required to report to Finanstilsynet. Institutions' reporting provides an important basis for analyses and on-site inspections. A complete overview of current reporting requirements is available in Norwegian.
All banks (and finance companies) are required to conduct an annual Internal Capital Adequacy Assessment Process (ICAAP) to determine their actual need for capital. An ICAAP must be forward-looking and must take into account business plans, growth and access to capital markets.
The main elements of Finanstilsynet's methodology for reviewing institutions' overall risk level and need for capital (SREP) is described in circular 12/2016.
Finanstilsynet's methodology builds inter alia on guidelines from the European Banking Authority. Circular 12/2016 also covers Finanstilsynet's requirements on the process for, and the content of, institutions' risk and capital assessments (ICAAP).
- Publication of Finanstilsynet's decision on Pillar 2 requirements for individual banks
- Circular No. 12/2016: Finanstilsynet's methodologies for assessing risk and capital needs
- EBA's guidelines on ICAAP and ILAAP information
- EBA's guidelines on common procedures and methodologies for the supervisory review and evaluation process (SREP)
Norway has signed the EU's Memorandum of Understanding on Cooperation between the financial supervisory authorities, central banks and finance ministries of the European Union on cross-border financial stability and a similar MoU between the Nordic and Baltic countries.
Finanstilsynet collaborates with supervisory authorities in other countries on the supervision of individual financial institutions operating in other EEA states in addition to Norway. Under the EU Capital Requirements Directive, Finanstilsynet, as consolidated supervisor, has established a College of Supervisors for the DNB Group. As the DNB Group's home country supervisor, Finanstilsynet is the college's coordinating authority. Finanstilsynet participates in similar collaborative forums for eight other EEA banks with one or more subsidiaries or branches in Norway (Nordea, SEB, Swedbank, Société Générale, Santander, Crédit Agricole, Danske Bank and Handelsbanken).