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Norwegian banks are well positioned to deal with market stress and the outlook for financial stability is largely unchanged since November, the central bank said in a semi-annual report on Wednesday.
"Growth prospects have improved somewhat over the past six months, but future developments in both markets and the economy are uncertain," Norges Bank Deputy Governor Paal Longva said in a statement.
Problems at some U.S. and Swiss banks have so far had little impact on Norwegian banks, the central bank said, but warned funding could become more expensive and make borrowing for households and firms more difficult.
It said that because of the banks' large exposure to commercial real estate (CRE), a sector in which funding costs have risen sharply, losses could be "considerable" should property prices and rental income fall sharply.
"A number of CRE firms hold considerable bond debt that will soon mature. However, banks have limited exposure to such firms with the weakest financial strength," it said.
Norway's banks are overall solid, liquid and highly profitable, it added.
It said banks must continue to hold countercyclical capital buffers representing 2.5% of their balance sheet to maintain the banking system's solidity.
Norges Bank sets the countercyclical capital buffer requirement four times a year. (Reporting by Victoria Klesty, editing by Terje Solsvik)