Høstkonferansen 2010 Bergen Argo Securities - Credit Research Guttorm L Egge

Transkript

1 Høstkonferansen 2010 Bergen Argo Securities - Credit Research Guttorm L Egge

2 Innholdsfortegnelse 3 Makrobildet for kreditt 4 Hvordan går det egentlig i USA 12 Rating og endrede ratinger 16 Utviklingen i det norske obl. markedet 17 Sammensetning og endringer 28 Utviklingen i lånemarginene per sektor 47 OmF et tveegget sverd? 54 Fremtiden for ansvarlig og hybrid kapital 71 Ferske obligasjonslån 74 Oppsummering 2

3 Makrobildet for kreditt

4 Bankkonkurser i USA siden Kilde: FDIC (t.o.m ) 4

5 Bankkonkurser i USA siden 1934 Kilde: FDIC (t.o.m : 3843 stk) 5

6 US banks: Kvartalsvis avkastning på total balanse Kilde: FDIC - www2.fdic.gov/qbp/index.asp 6

7 US banks: Kvartalsvise tapsavsetninger ift inntekter Kilde: FDIC - www2.fdic.gov/qbp/index.asp 7

8 US banks: Kvartalsvise tapsavsetninger ift utlån Kilde: FDIC - www2.fdic.gov/qbp/index.asp 8

9 US banks: Andel ukurante lån Kilde: FDIC - www2.fdic.gov/qbp/index.asp 9

10 US banks: Ukurante lån ift kjernekapital Kilde: FDIC - www2.fdic.gov/qbp/index.asp 10

11 US banks: Andel utlån til næringseiendom Kilde: FDIC - www2.fdic.gov/qbp/index.asp 11

12 Norske banker per q Kilde: 12

13 Banker i det norske markedet rangert etter offisiell rating S&P / Moody s / Fitch AAA / Aaa / na Kommunalbanken AS AA / Aa1 / na Eksportfinans ASA AA- / Aa2 / AA- Nordea Bank Norge ASA AA- / Aa2 / AA- Svenska Handelsbanken AB A+ / Aa3 / A+ DnB NOR Bank ASA A / Aa3 / A+ Danske Bank A/S A / A1 / A+ Skandinaviska Enskilda Banken AB na /A1 / A Spb 1 Nord-Norge na /A1 / A Spb 1 SMN na /A1 / A Spb 1 SR-Bank na /A2 / na Spb Møre (ny ) A / A2 / na Swedbank AB na /A2 / A- Spb Vest na /A3 / na Spb Sør (ny ) na /A3 / na Spb Øst BBB+ / A3 / na Storebrand Bank ASA na /Baa1 / na Spb 1 Gruppen AS BBB /Baa3 / BBB Storebrand ASA 13

14 De siste ratingendringer Moody s om SR-Bank: Fra Negative til Stable outlook Spb 1 SR-Bank (na / A1 / A) (Sep 7) Moody's Investors Service has today changed to stable from negative the outlook on the C- bank financial strength rating (BFSR) and the A1 long-term debt and deposit ratings of SpareBank 1 SR-Bank. The outlook on the bank's subordinated debt and hybrid instrument ratings was also changed to stable. The Prime-1 short-term rating was affirmed. The stable outlook primarily reflects Moody's expectation that the negative pressure on the bank's profit from asset quality issues will gradually ease, although the performance may not return to its pre-crisis level in the medium term. In recent quarters, loan-loss provisions have declined, accounting for 13% of pre-provision income in 2010, down from a 37% peak in the FY2008. In addition, problem loans remain relatively low, at 1.4% of gross loans. Furthermore, Moody's takes comfort from the fact that the Norwegian economic environment is currently relatively stable and has been among the most resilient to the global downturn. The ratings continue to be underpinned by: (i) the bank's strong regional market position in south-western Norway; (ii) its membership of the SpareBank 1 Alliance; (iii) its relatively resilient core banking earnings; and (iv) its improved Tier 1 ratio, at 9.1% at end-june An upgrade of the banks' ratings could be triggered by a sustainable improvement in earnings without an increase in its risk profile. A reduction of loan concentrations may also result in upward pressure on the ratings. However, Moody's remains concerned about the bank's relatively concentrated loan book. In particular, the bank's exposure to the real-estate sector represents over 20% of its total loans, excluding mortgage loans transferred to the alliance's covered bond company, SpareBank 1 Boligkreditt. Moody's also notes the bank's reliance on wholesale funding, which accounted for around half of its total funding. SpareBank 1 SR-Bank's ratings could be negatively affected if credit quality weakens to a greater extent than envisaged in Moody's base-case stress scenario, which would exert pressure on the bank's capitalisation. Moody's previous rating action on SpareBank 1 SR-Bank was implemented on 26 February 2010, when the junior subordinated debt and Tier 1 hybrid ratings were downgraded to A3 and Baa2, respectively, following the release of Moody's revised methodology (see "Moody's Guidelines for Rating Bank Hybrid Securities and Subordinated Debt" published on 17 November 2009). The principal methodologies used in rating SpareBank 1 SR-Bank are Moody's "Bank Financial Strength Ratings: Global Methodology", published February 2007, and "Incorporation of Joint-Default Analysis into Moody's Bank Ratings: A Refined Methodology", published in March 2007, which are available on in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating Methodologies sub-directory on Moody's website. Headquartered in Stavanger, Norway, SpareBank 1 SR-Bank reported total consolidated assets of around NOK129 billion (EUR16.3 billion) at the end of June

15 De siste ratingendringer Moody s om Nord-Norge: Fra Negative til Stable outlook Spb 1 Nord-Norge (na / A1 / A) (Sep 7) Moody's changes outlook on SpareBank 1 Nord-Norge to stable from negative Moody's Investors Service has today changed to stable from negative the outlook on the C bank financial strength rating (BFSR) and the A1 long-term debt and deposit ratings of SpareBank 1 Nord-Norge. The outlook on the bank's subordinated debt and hybrid instrument ratings were also changed to stable. The Prime-1 short-term rating was affirmed. The stable outlook primarily reflects Moody's opinion that the asset quality of the bank will gradually stabilise. Indeed, in the recent quarters, loan loss provisions have decreased, reaching a low 8% of pre-provision income in H1 2010, down from the 27% peak in In addition, problem loans remain relatively low at 1.7% of gross loans. Furthermore, Moody's takes comfort from the fact that the Norwegian economy has been among the most resilient to the global downturn. The bank's ratings continue to be supported by: (i) its sound franchise in northern Norway; (ii) its membership of the SpareBank 1 Alliance; (iii) its relatively resilient core banking earnings; and (iv) its strengthened Tier 1 ratio of 11.2% at end-june An upgrade of the banks' ratings could be triggered by a sustainable improvement in earnings without an increase in its risk profile. A reduction of loan concentrations may also result in upward pressure on the ratings. However, SpareBank 1 Nord-Norge's concentrated loan portfolio remains potentially vulnerable due to its relatively large real-estate exposure, which totalled around 15% of its gross loans (excluding mortgage loans transferred to the alliance's covered bond company, SpareBank 1 Boligkreditt). In addition, despite its substantial deposit base, SpareBank 1 Nord-Norge's funding is geared towards wholesale funding (around 40% of its total funding). SpareBank 1 Nord-Norge's ratings could be negatively affected if credit quality deteriorates to a greater extent than foreseen in Moody's basecase stress scenario, which would exert pressure on the bank's capitalisation. Moody's previous rating action on SpareBank 1 Nord-Norge was implemented on 26 February 2010, when the Junior Subordinated debt and Tier 1 hybrid ratings were downgraded to A3 and Baa2, respectively, following the release of Moody's revised methodology (see "Moody's Guidelines for Rating Bank Hybrid Securities and Subordinated Debt" published on 17 November 2009). The principal methodologies used in rating SpareBank 1 Nord-Norge are Moody's "Bank Financial Strength Ratings: Global Methodology", published February 2007, and "Incorporation of Joint-Default Analysis into Moody's Bank Ratings: A Refined Methodology", published in March 2007, which are available on in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating Methodologies sub-directory on Moody's website. Headquartered in Tromsø, Norway, SpareBank 1 Nord-Norge reported total consolidated assets of around NOK66 billion (EUR8.3 billion) at the end of June

16 Utviklingen i det norske obligasjonsmarkedet

17 Sektorfordeling av volum i milliarder NOK (Stamdata) Bank/Finans 854 mrd (756 i fjor) Totalt volum er 1692 (1514) milliarder kroner per

18 778 mrd The Norwegian bond & CP market by issuer sector and volume in NOK billion No of NOK BIS Group Volume Group Issuers bn Weight % % % BIS weight 34.6% % - BIS weight 23.4% 100% Government Government enterprises enterprises / Statsforetak / Statsforetak SF SF 0.1% 0% Covered Covered bonds / Obl. bonds med / Obl. fortrinnsrett med fortrinnsrett 23.3% 100% % - BIS weight - Municipalities 3.4% 100% Counties Counties / Fylker / Fylker 0.5% 14% Municipalities Municipalities / Kommuner / Kommuner 2.8% 82% Municipal Municipal companies companies (20%) (20%) 0.0% 1% Electricity Electricity companies companies (20%) (20%) 0.1% 2% % - BIS weight - Financials 22.8% 100% Mortgage Mortgage institutions institutions / Kredittforetak / Kredittforetak 2.1% 9% Commercial Commercial Banks / Forretningsbanker Banks / Forretningsbanker 7.1% 31% Savings Savings Banks / Sparebanker Banks / Sparebanker 13.1% 57% Finance Finance companies companies 0.3% 1% Insurance Insurance companies companies 0.2% 1% % - BIS weight 14.4% 100% Municipal Municipal companies companies 0.5% 3% Real estate Real companies estate companies 1.0% 7% Electricity Electricity companies companies (100%) (100%) 4.1% 28% General General industry industry 2.5% 17% Oil-Offshore Oil-Offshore 5.2% 36% Shipping:Shipping: 1.2% 8% % - BIS weight - Subord. debt 1.0% 100% Mortgage Mortgage institutions institutions / Kredittforetak / Kredittforetak 0.0% 3% Commercial Commercial Banks / Forretningsbanker Banks / Forretningsbanker 0.3% 28% Savings Savings Banks / Sparebanker Banks / Sparebanker 0.5% 48% Finance Finance companies companies 0.0% 4% Insurance Insurance companies companies 0.2% 17% % - BIS weight - Capital Contrib. Securities 0.5% 100% Mortgage Mortgage institutions institutions / Kredittforetak / Kredittforetak 0.0% 1% Commercial Commercial Banks / Forretningsbanker Banks / Forretningsbanker 0.0% 10% Savings Savings Banks / Sparebanker Banks / Sparebanker 0.3% 67% Insurance Insurance companies companies 0.1% 23% Total all issuers 100% x 18

19 Fortsatt høyt emisjonsvolum i senior bank i 2009 Kilde: Oslo Børs og ABM 65 mrd Indu stri opp igjen 19

20 ...og det har fortsatt inn i 2010 Kilde: VPS (alle norske lån) 20

21 Emisjoner i utlandet per måned i mrd NOK Kilde: VPS/SSB Banker Obl+Ser 2007: 324 mrd 2008: 513 mrd 2009: 471 mrd 2010: 229 juni Fra Norge ble det hentet kun 78 mrd i

22 Emisjoner i Norge og utlandet per måned i mrd NOK Kilde: VPS/SSB 22

23 Utstederfordeling per måned i prosent Kilde: VPS/SSB Andelen bank og kredittforetak har økt fra 37 til 40% siden juni 08 23

24 Utestående volum for banker og kredittforetak Kilde: VPS/SSB Sektorene er snart like store målt i volum 24

25 Gjedrem om Boligfinansieringen i Norge aspx For å legge til rette for at bankene kunne låne mer i Norges Bank under finansuroen, lempet vi midlertidig på kravene til sikkerhet. I oktober i fjor varslet vi endringer i det midlertidige regelverket for sikkerhet for lån. Inntaket av nye verdipapirer som kunne godkjennes etter midlertidig regelverk, ble stoppet i oktober. Vi har lagt opp til at verdipapirer som allerede er godkjent etter midlertidig regelverk, skal kunne benyttes som pant til de forfaller og senest fram til 15. februar Vi varslet også endringer i den såkalte bankkvoten. Dagens regler innebærer at inntil 35 prosent av en banks låneadgang kan være basert på pant i obligasjoner utstedt av andre norske banker. Fra 1. desember 2010 er det lagt opp til at utenlandske bankpapirer inngår i bankkvoten. Fra 15. februar 2012 vil vi eventuelt fjerne adgangen til å bruke bankpapirer som sikkerhet for lån. Obligasjoner med fortrinnsrett vil vi fortsatt godta som sikkerhet. Vi antar dette vil bidra til å bygge opp markedet for OMF-er i Norge. 25

26 Eiere per sektor på Oslo Børs (uten ABM) Bank eier fortsatt bank, men nærmer seg raskt Eierstruktur etter sektor i % / Ownership structure by sector in % 2009 Obligasjoner / Bonds Sertifikater / Bills 2009 Sektor Stats- Stats- Komm. Bank & Kreditt- Industri Annet Stat Finans Kreditt Låne Andre Sector Eier lån gar. & fylker forsikr. foretak & øvrige Owner Foretak Companies Stat & kommune Government & municipalities Trygdeforvaltningen Social security Banker Banks Obligasjonsfond Fixed income fund Kred.for. & Hyp.banker Mortgage banks Forsikr. & priv.pensj.kas Insurance & pension funds Privatpersoner Private Utlendinger Foreigners Andre Others Totalt Total Utestående volum i mrd Nominal values NOK bn Govern. Govern. Munici. Banks Mort. Ind. & Other Bank Finance Mort- Loan Other bonds guar. & m.guar. & insur. banks others gage Kilde: w w w.oslobors.no/oslo-boers/statistikk/aarsstatistikk/(index)/ Obligasjoner / Bonds Sertifikater / Bills 2008 Sektor Stats- Stats- Komm. Bank & Kreditt- Industri Annet Stat Finans Kreditt Låne Andre Sector Eier lån gar. & fylker forsikr. foretak & øvrige Owner Foretak Companies Stat & kommune Government & municipalities Trygdeforvaltningen Social security Banker Banks Obligasjonsfond Fixed income fund Kred.for. & Hyp.banker Mortgage banks Forsikr. & priv.pensj.kas Insurance & pension funds Privatpersoner Private Utlendinger Foreigners Andre Others Totalt Total Utestående volum i mrd Nominal values NOK bn Govern. Govern. Munici. Banks Mort. Ind. & Other Bank Finance Mort- Loan Other bonds guar. & m.guar. & insur. banks others gage Forsikring og pensjonskasser er dominerende i alle sektorer unntatt Annet Banker og trygdeforvaltningen er også store 26

27 Eiere per sektor på ABM Reduksjon i andelen bank eid av bank, og økning i OmF ALTERNATIVE BOND MARKET (ABM) Eierstruktur OBLIGASJONER / BONDS Tall ved årsslutt / Figures at year end Kilde: Verdipapirsentralen / Source: The Norwegian Registry of Securities SERTIFIKATER / BILLS & CERT. Statslån Stats- Komm. Bank & Kreditt- Industri Annet Låne- Bank gar. &fylker forsikr. foretak &øvrige sertifi. sertifi. Govern. Govern. Munici. Banks Mort. Ind.& Other Loan Bank bonds guar..& m.guar. &insur. banks others certific. certific. % % % % % % % % % Foretak Companies Stat & kommune Government & municipalities Trygdeforvaltningen Social security administration Banker Banks Obligasjonsfond Bond funds Kred.for. & Hyp.banker Mortgage companies Forsikr. & priv.pensj.kas Insurance & Private pension funds Privatpersoner Private investors Utlendinger Foreign investors Andre Others Totalt obligasjoner Total ALTERNATIVE BOND MARKET (ABM) Eierstruktur 2008 OBLIGASJONER / BONDS SERTIFIKATER / BILLS & CERT. Statslån Stats- Komm. Bank & Kreditt- Industri Annet Låne- Bank gar. &fylker forsikr. foretak &øvrige sertifi. sertifi. Govern. Govern. Munici. Banks Mort. Ind.& Other Loan Bank bonds guar..& m.guar. &insur. banks others certific. certific. % % % % % % % % % Foretak Companies Stat & kommune Government & municipalities Trygdeforvaltningen Social security administration Banker Banks Obligasjonsfond Bond funds Kred.for. & Hyp.banker Mortgage companies Forsikr. & priv.pensj.kas Insurance & Private pension funds Privatpersoner Private investors Utlendinger Foreign investors Andre Others Totalt Total Forsikring og pensjonskasser er store på ABM også Bankene har forsynt seg godt av kredittforetak det siste året (fra 24 til 46%) 27

28 Historisk utvikling i lånemarginene

29 Det er rekordbillig å låne penger All-time low: 2,306 den (2, ) 2,85 29

30 Historiske 5-dagers endringer i 10-års swap renter Data fra til Rank Cng (5d) Date Rank Level Rank Rank Cng (5d) Date Rank Level Rank Siden 17 August 1995: 10-års swap renter har økt med mer enn 25bp i løpet av fem dager 64 ganger 10-års swap renter har falt med mer enn 25bp i løpet av fem dager 68 ganger års EUR Swap +28bp (Fra 2.33 til 2.61) Aug. 31 til Sep års USD Swap +20bp (Fra 2.45 til 2.65) Aug. 31 til Sep. 3 30

31 Historisk akkumulert avkastning for statsobligasjoner Svært bra avkastning hittil i år også, til tross endringen denne måneden 2001, 2002, 2003 og 2008 gav over 8% for lang stat elendig i 09 31

32 Kvartalsvise endringer i itraxx indeksene itraxx CDS spreads Index Index Change Change Change Change in 2008 Change in 2009 Change in 2010 level this this from Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q week month itraxx Europe 5y itraxx Fin.Sen. 5y itraxx Fin.Sub. 5y itraxx X-over 5y

33 5 års EUR obligasjoner siste år Minimale endringer Kilde: Reuters AA i rødt A i blått BBB i grønt 33

34 itraxx sector indices (CDS) Kilde: Markit - BB Gjennomsnittelig rating for Crossover (50) AA-/A+ Gjennomsnittelig rating fra Fitch for Finans (25) Aa2/Aa3 Gjennomsnittelig rating fra Moody s for Finans (25) 34

35 itraxx Europe/Financials Relative value Industri lavere enn finans helt siden årsskiftet 35

36 EUR Eurobond credit spreads By rating and sector Sep 17 Spread to swap Spread to government bonds 36

37 Eurobond credit spreads By rating, currency and maturity Sep 17 Noe lavere nivåer enn for ett år siden, men omtrent samme profil 37

38 Reuters EUR spreader fordelt på rating 17 sep. Kilde: Reuters Flatere kurve i EUR enn i NOK 38

39 Reuters EUR spreader fordelt på sektor 17 sep. Kilde: Reuters Finans høyest Konsum lavest Transport brattest 39

40 Bankvifta Lånekostnad fordelt på 8 kategorier Kilde: Argo VFF-kategorier, men det er ingen fasit! 40

41 Obligasjoner med fortrinnsrett - Tyskland Nullkupong spread for eksisterende lån Tyskland 41

42 Obligasjoner med fortrinnsrett - Frankrike Nullkupong spread for eksisterende lån Frankrike 42

43 Obligasjoner med fortrinnsrett - Spania Nullkupong spread for eksisterende lån Spania 43

44 Obligasjoner med fortrinnsrett - Sverige Nullkupong spread for eksisterende lån Sverige 44

45 Bytteordningen 229,51 mrd Skal erstattes i løpet av 5 år 45

46 Bytteordningen Forfallsoversikt 76 mrd innen utgangen av mrd i mrd i 2013 og 87 mrd i

47 Hvor mye kan finansieres gjennom OmF uten at ratingen for senior lån svekkes OmF et tveegget sverd? Det finnes ingen absolutt grense, knapt nok en flytende heller En stor del av likviditeten som frigjøres benyttes til plasseringer i andre OmF, statspapirer og andre sikre plasseringer Dessuten har en ny finansieringskilde en verdi i seg selv Danske kredittforetak har kunnet låne penger hele tiden under finanskrisen På den annen side reduseres andelen sikre lån til fordel for mer usikre Bankene vil derfor etter hvert ligne mer på dagens danske banker Fitch påpekte noen av disse forholdene under en konferanse om risiko i markedet for statsobligasjoner og OmF i Oslo 8. september På direkte spørsmål etterpå ble det antydet at så mye som 50 prosent av boliglånene muligens kan finansieres gjennom OmF før seniorgjelden blir nedgradert Foreløpig har ingen banker kommet dit, og Fitch forventer ikke at vi vil se nedgraderinger med denne begrunnelsen før om et par år Konsernstruktur og alternativ plassering av frigjorte midler vil uansett ha betydning for hva som tåles 47

48 Dagens andeler av OmF for noen utvalgte banker Kilder: Kvartalsrapporter for q Andel OmF og egenkapitalandel Sum Brutto Netto PM-lån PM-lån Bolig- Boligkreditt som andel av Nærings- EK EK Ansv. for et utvalg av de største bankene Eiendeler utlån utlån Brutto Netto kreditt Eiendeler Brutto Netto Brutto Netto kreditt i låneper 2. kvartal 2010 Mrd Mrd utlån utlån PM lån PM lån Mrd Mrd % kapital Norske banker DnB NOR Bank ASA Nordea Bank Norge ASA Spb 1 SR-Bank Kvinnherad Spb 09-q Spb Vest Spb 1 SMN Spb 1 Nord-Norge Spb Hedmark (Spb 1) Spb Møre Storebrand Bank ASA Spb Sør Spb Pluss BN Bank ASA Spb Sogn og Fjordane Sandnes Spb Bank 1 Oslo AS Spb Øst Spb 1 Buskerud-Vestfold Helgeland Spb Spb 1 Ringerike-Hadeland Spb Jevnaker Lunner q Gran Spb 09-q Landkreditt Bank AS Gjensidige Bank ASA Rygge-Vaaler Spb (Spb 1) Spb 1 Telemark Totens Spb Fana Spb Spb 1 Nordvest Spb Volda Ørsta (Spb 1) Nøtterø Spb (Spb 1) Spb 1 Hallingdal Modum Spb (Spb 1)

49 Dagens andeler av OmF for noen utvalgte banker Kilder: Kvartalsrapporter for q Andel OmF og egenkapitalandel Sum Brutto Netto PM-lån PM-lån Bolig- Boligkreditt som andel av Nærings- EK EK Ansv. for et utvalg av de største bankene Eiendeler utlån utlån Brutto Netto kreditt Eiendeler Brutto Netto Brutto Netto kreditt i låneper 2. kvartal 2010 Mrd Mrd utlån utlån PM lån PM lån Mrd Mrd % kapital Pareto Bank ASA Halden Spb (Spb 1) Spb 1 Gudbrandsdal Spb Hardanger (Spb 1) Spb 1 Lom og Skjåk Voss Veksel- og Landmandsbank ASA Bank Norwegian AS Hol Spb Verdibanken ASA ' Sum Gjennomsnitt Median Nordiske banker Nordea Bank AB (EUR) Danske Bank (DKK) SEB (SEK) Handelsbanken (SEK) Swedbank (SEK)

50 Historical spread levels Financials (AA-/A) 50

51 Actual trades Aug Financials Slightly tighter, especially for longer maturities (Avg.: 3y FRN 79, 3y Fixed +60) 51

52 Historical spread levels Industrials / Statkraft / A- curves 52

53 Actual trades Aug Utilities Almost unchanged 53

54 Ansvarlig kapital og nye regler

55 Slakkere krav i USA DN

56 Kapitalbehov i USA halveres efter revidering af Basel III Bankinfo ( Efter den seneste ændring af Basel III- reglerne ser kapitalbehovet for de amerikanske banker ud til kun at blive halvt så stort som tidligere ventet. Barclays Capital vurderer i følge svenske Nyhetsbyrån SIX, at de store amerikanska banker vil kunne leve op til kapitalkravene uden at behøve at optage nye betydelige kapitalbeløb. De 35 største USAbanker behøver blot at øge egenkapitalen via oparbejdede gevinster eller ny kapital - med 115 mia. USD mod tidligere beregnet 225 mia. USD. 56

57 Økt tapsabsorbasjon i ansvarlige lån - BIS Proposal to ensure the loss absorbency of regulatory capital at the point of non-viability The Basel Committee on Banking Supervision has issued for consultation a proposal to ensure that all regulatory capital instruments are able to absorb losses in the event that the issuing bank reaches the point of non-viability. It is based on a requirement that the contractual terms of capital instruments will allow them at the option of the regulatory authority to be written-off or converted to common shares in the event that a bank is unable to support itself in the private market in the absence of such conversions. The proposal is an important element of finalising the Committee's package of measures to strengthen the resilience of the banking sector, set out in the December 2009 consultative document Strengthening the resilience of the banking sector. The Committee welcomes comments on all aspects of this proposal by Friday 1 October Full publication (PDF 20 pages, 104 kb)

58 Hardere kapitalkrav for bankene Group of Governors and Heads of Supervision announces higher global minimum capital standards Common equity requirements raised from 2% to 4.5% An introduction of a conservation buffer ( bevaringsbuffer ) of 2.5% which is suppose to meet periods of stress. Banks earning disposal will be limited if the conservation buffer is not met and the limitations increase the smaller the buffer gets. An introduction of countercyclical buffer ( motsyklisk kapitalbuffer ) of 0-2.5% which is supposed to be set by national authorities in periods of excess credit growth Tier 1 requirements raised from 4- to 6% An introduction of a Tier 1 capital to non-risk weighted capital requirement of 3%. This element will only be tested until 2017 and set as an requirement in 2018 (given successful testing period). Norwegian banks are as of today sufficiently capitalised to meet the higher capital standards. We also believe that the Norwegian authorities will be cautious in applying the countercyclical buffer as restrictions on Norwegian banks are in many cases stricter than that of European and US banks. 58