October 19, 2018 / 3:54 PM / 9 months ago

UPDATE 1-Norwegian regulator wants more banks considered systemically important

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OSLO, Oct 19 (Reuters) - More Norwegian banks should be considered systemically important and be subject to higher capital requirements, the country’s financial regulator said on Friday.

They should include lenders with a share of 10 percent or more in their local market, such as Sparebanken Vest, SR Bank and Sparebanken Oestlandet, the Financial Supervisory Authority (FSA) said.

The aim is to ensure that banks remain resilient during a downturn, and thus able to continue to lend when the economy weakens, the regulator said.

A final decision will be made by Norway’s finance ministry.

Other banks that should be considered systemically important include Sparebanken Soer, Sparebank 1 SMN, Sparebank 1 Nord-Norge, Sparebanken Oest and Sparebank 1 Finans Midt Norge, the FSA said in a statement.

Currently, only DNB, the country’s largest bank and a major lender to the oil and gas sector, and Kommunalbanken , a state-owned bank that provides financing for Norwegian municipalities, are considered systemically important.

When a bank is named systemically important, it faces an additional risk-adjusted core capital requirement of two percentage points on top of its remaining core capital, the FSA said.

On an unadjusted basis, the requirement amounts to 1 percentage point, it said, adding that a pending implementation of so-called minimum requirements for own funds and eligible liabilities (MREL) could add further demands. (Reporting by Gwladys Fouche, editing by Terje Solsvik and Susan Fenton)

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