OSLO: Norway will ask its banks to make more regular contributions to its bank deposit guarantee fund, scrapping the current system of exemptions applicable when fund assets exceed a certain size.
The fund, worth 22.7 billion crowns ($3.94 billion) at the end of 2011, needs to be raised to reduce systemic risk in the sector, the finance ministry said in a statement on Friday, confirming an earlier proposal.
Norwegian banks did not have to pay into the fund in 2011 and 2012 as its size was bigger than required.
DNB, Norway's biggest bank, expects to pay between 700 million and 800 million crowns ($121.4 mln-$138.7 mln) per year, it said on Friday.
"This will add to the burden for Norwegian banks," spokesman Thomas Midteide said. "Last time (in 2010) we paid between 700 million and 800 million crowns into the fund, so that is our starting point for what we think we will pay. "
The fund in its current form was set up in 2004, and was tapped during the financial crisis in 2008 to compensate Norwegian deposit holders for losses in Icelandic banks such as collapsed lender Kaupthing.
In the years that banks have paid a full or partial annual fee to the fund, these fees have totalled between 500 million and 1.7 billion crowns. In 2010 they paid 1.7 billion crowns, or 0.045 percent of the total assets under management.
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