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.
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 capital base must be sufficient to survive an economic downturn accompanied by negative results and problems in obtaining fresh capital. Pillar 2 of the revised capital adequacy framework- guidelines for assessing risk profile an calculating capital needs at institutions.
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 NOR Group. As DnB NOR'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).
Read more about the College of Supervisors for the DnB NOR Group.