Largest Norwegian banks will use FIRB approach for credit risk
The five largest Norwegian banks have applied to use the advanced approaches for credit risk, said the deputy governor for Norway’s central bank.
Jarle Bergo announced that the banks will use the Foundation Internal Ratings-Based (FIRB) approach, and that capital levels will substantially fall as a result.
Mortgages constitute a large part of Norwegian assets, which is another reason for the expected drop in capital.
Despite this, Bergo stressed that there is little risk of a financial crisis in
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