Kredittilsynet was established in 1986 as the first integrated supervisory authority for the financial market in the western world. On 21 December 2009 Kredittilsynet changed its name to Finanstilsynet.

In 1986 the Banking Inspectorate – into which the Securities Commission had been absorbed in 1983 – was merged with the Insurance Council, thereby creating the first integrated supervisory authority for the financial market in the western world.

A growing number of countries have subsequently adopted this model. Also looking to the future, Norway’s financial industry has opted for a joint organisational structure with a common industry association for commercial banks and insurance companies.

A joint supervisory body for the entire financial market provides a better basis for responding to the dynamic development of products and services in the market and for overseeing financial groups across the traditional sectoral divides.

Through its additional responsibility for real estate agency, debt collection and insurance mediation, its oversight of auditors and accountants and its responsibility for ensuring listed companies’ compliance with the Accounting Act and international financial reporting standards, Kredittilsynet provides security for users and promotes well functioning markets.

Kredittilsynet’s first decade was marked by a crisis in the Norwegian banking system. The government was compelled to take over commercial banks accounting for three quarters of this bank category’s total assets. Savings banks representing half of this category’s total assets were in need of substantial capital injections from the government or the guarantee fund.

The following decade heralded a favourable economic climate for the financial industry. Kredittilsynet has stressed that financial institutions should maintain a sound equity capital position and good internal control in order to prevent new crises and to fulfil their social role by being able to assume new risk in their lending operations. The prospects for Norwegian financial institutions appear excellent in the short term. However, international experience shows that it is precisely in periods of vigorous growth that a basis can be laid for future problems.

Recent years’ steep growth in house prices and household debt entails a real risk of a sudden contraction, possibly accompanied by falling house prices and potential problems for a number of late market entrants with a high loan-to-value ratio. It is still demanding for insurers to honour the returns they have guaranteed. At the same time pension obligations for an increasingly longer lived population are creating new challenges. 

Publications about the history of Finanstilsynet

Protection against Crises? A Century of Financial Supervision in Norway

This article written by Gunhild J. Ecklund and Sverre Knutsen is based on their book Vern mot kriser? Norsk finanstilsyn gjennom 100 år (Fagbokforlaget, 2000). The book was the result of a research project commissioned by Kredittilsynet (The Banking, Insurance and Securities Commission of Norway), Norges Bank (The Central Bank of Norway) and Oslo Børs (Oslo Stock Exchange).

Experiences and Challenges

Anniversary publication – 20 years as integrated supervisory authority 

Kredittilsynet was established in 1986 as the first integrated supervisory authority for the financial market in the western world. With this publication Kredittilsynet wishes to commemorate the 20th anniversary of the agency’s formation.

The article compilation illuminates various aspects of financial sector supervision. Part I presents Kredittilsynet’s work over the past 20 years and legislative developments in the financial and securities sphere. Part II takes up international trends, discussing the benefits of an integrated European capital market, changes in the insurance and pensions market and the role of the regulator, financial stability and the macroprudential approach to regulation and supervision, challenges to European supervisors in implementing Basel II and the UK Financial Services Authority’s experiences with financial regulation and consumer protection.

As a step in preparing its new strategy, Kredittilsynet has analysed financial market developments and new challenges for the agency, and assessed objectives and performance measurements in relation to financial stability and well functioning markets. Part III presents these analyses together with articles focusing on the development of a new supervisory tool for risk-based supervision and the regulation of, and new legislation for, real estate agents.

The fourth and final part of this publication presents external perspectives on Kredittilsynet’s work and areas of activity, first from the vantage point of the Norwegian Financial Services Association. This article gives their view of the supervision of the financial and insurance industry today, also in a European perspective. After that the Norwegian Savings Banks Association describes the supervision of the financial industry as seen by the savings banks – and also discusses the work done by Kredittilsynet during and after the banking crisis. The final articles deal respectively with the audit industry and Kredittilsynet’s role in the financial market, in particular in relation to the consumer in a deregulated market.

Articles in English from the anniversary publication:

Part II. International trends