Financial Stability 2/2004
Annex 2: Other published material on financial stability at Norges Bank
The following are short summaries of articles and books dealing with financial stability issues written by researchers and employees at Norges Bank and published in the Bank’s various publications in the course of 2004. The conclusions and viewpoints presented in signed articles are those of the authors and do not represent the views of Norges Bank.
Aggregate bankruptcy probabilities and their role in explaining banks’ loan losses
Working Paper 2004/2, Norges Bank.
Author: Olga Andreeva
In this paper statistics on loans to Norwegian industries and regions are combined with bankruptcy probabilities for individual corporate borrowers in order to construct a proxy reflecting the risk profile of the banks’ loan portfolios. Aggregation within industries and counties provides a bank-level panel of risk indicators, which are used to estimate banks’ loan losses during the period 1988 – 2001. Constructed aggregate bankruptcy probabilities prove to be meaningful measures, which explain loan losses if we control for the macroeconomic and bank specific factors.
The Norwegian Banking Crisis
Norges Bank Occasional Paper 33
Edited by Thorvald G. Moe, Jon A. Solheim and Bent Vale
It has been ten years since the Norwegian banking crisis ended. This publication provides a comprehensive, but reasonably compact description of the Norwegian banking crisis. It contains six chapters and two appendices, each written by a different author. Each article may be read independently of the others.
Historical Monetary Statistics for Norway 1819 - 2003
Norges Bank Occasional Paper 35
This publication provides detailed documentation of Norges Bank’s historical monetary and financial database. A description of historical developments is also given. The data is available in spreadsheets on Norges Bank’s website.
Upgrading and outsourcing Norges Bank’s settlement system
Economic Bulletin June 2004 (No. 2)
Authors: Jon A. Solheim and Helge Strømme
In recent years, Norges Bank has focused more strongly on its core activities as a central bank, and this has also had a bearing on its activities related to the payment system. This article reviews recent years’ efforts to evaluate Norges Bank’s settlement system in light of the central bank’s strategy and primary objectives. Information is also provided on the evaluation of possible models for organising the settlement system and why Norges Bank has chosen to outsource. The risks inherent in such a solution are discussed and the implementation process described.
What influences the growth of household debt?
Economic Bulletin October 2004 (No. 3)
Authors: Dag Henning Jacobsen and Bjørn E. Naug
Household debt has increased by 10–11 per cent annually since 2000. In this article, the factors underlying the strong growth in debt are analysed using an empirical model. The debt growth of recent years is found to be related to developments in the housing market and to the decline in interest rates since December 2002. As a result of the sharp rise in house prices from 1998 to 2001, debt growth remained at a high level while house prices declined in the latter half of 2002 and into 2003. This reflects the fact that only a small portion of the housing stock changes hands each year. Even if house prices level off following a rise, there will be a long period during which houses change hands at a higher price than the last time they were sold. An increase in house prices will therefore contribute to debt growth for a long time.