Norges Bank can offer extraordinary liquidity to the complete bank system or specific banking institutions whenever use of liquidity off their sources is reduced. The liquidity that is extraordinary Norges Bank can offer may avoid monetary dilemmas from distributing and so avoid a wider crisis from arising.
Liquidity towards the whole bank system
Norges Bank can offer liquidity that is extra the bank system in the type of F-loans and D-loans. If the desired liquidity need is big, collateral demands may vary from those set straight down into the legislation in the Access of Banks to Borrowing and Deposit places in Norges Bank etc. (the “Lending Regulation”) for D-loans and F-loans (cf part 6 for the legislation).
Norges Bank can offer extraordinary liquidity to specific banking institutions if liquidity dilemmas are limited by one or a couple of banking institutions. Norges Bank expands credit on unique terms or crisis liquidity help (ELA) just in instances where stability that is financial at danger if such that loan is certainly not extended. Continue reading