Norway's banks must prepare for downturn

Norway's economy will be hard hit if Europe falls back into recession and the nation's banks must boost their capital buffers to prepare for lending losses, the head of the Nowegian Financial Supervisory Autority (FSA) told Reuters. The oil producing nation recorded only a shallow economic downturn in the wake of the 2008 collapse of Lehman Brothers that triggered severe hardship for many Europeans, but this time it could get worse, Director General Morten Baltzersen said.
"We must be prepared for the fact that Norwegian businesses could be hit much harder than they were three years ago," he said, adding that weakness in Europe and the US may not be compensated by sufficient growth in other parts of the world. "Norwegian businesses must be prepared to be hit hard, in particular if the price of oil were to fall considerably," Baltzersen noted.