Norway central bank governor demands tougher bank regulation
OSLO, Feb 12 (Reuters) – Norway’s central bank Governor Svein Gjedrem called on Thursday for tougher capital requirements on banks and said Norwegian interest rate policy could still provide scope for economic stimulus. In his annual speech, Gjedrem said financial sector regulations must be overhauled as Norway, along with many other countries, showed signs of “faltering faith in the future and loss of confidence in banks (and) counterparties.”
“New and higher capital requirements must be imposed on banks,” Gjedrem told politicians and Norway’s business elite at Norges Bank headquarters in central Oslo.
“Banks must build up strong capital buffers over and above the minimum requirements in normal times… (so) they would be able to absorb losses and avoid the need to ration credit in bad times,” he added.