Financial accounts, Q3 2008

The securities' holdings by the end of the third quarter of 2008 were strongly affected by the financial instability. Among the sectors with the largest holding loss are households and non-profit institutions. Households' holding losses amounted to NOK 90 billion in the last four quarter period, of which half of the loss was due to the quoted development in the third quarter of 2008.

Households' net financial assets ratio fell significantly in the third quarter

Households' net lending is calculated as NOK -57 billion in the four quarter period including the third quarter of 2008, which is at the same level as the previous four quarter period. However, financial investments as well as borrowing fell substantially in the last quarter. Households' net financial assets were reduced by NOK 147 billion in the last four quarter period. Most of the reduction took place in the third quarter, when net financial assets fell by almost NOK 70 billion. Households' net financial assets were estimated at NOK 301 billion at the end of the last quarter. This constitutes 31.3 per cent of disposable income, while net financial asset ratio was 37.3 per cent at the end of the second quarter of 2008.

Banks loans exceed deposits in the Central Bank

In the last four quarters, commercial and savings banks' loans have exceeded deposits in the Central Bank of Norway. Domestic banks normally have higher deposits than loans in the Central Bank, but due to the financial instability the Central Bank increased loans to banks to strengthen their liquidity. By the end of the third quarter of 2008, commercial and savings banks' loans in the Central Bank amounted to NOK 72 billion. At the same time, the deposits amounted to NOK 37.5 billion, which placed the banks in a net borrowing position of NOK 34.5 billion to the Central Bank of Norway.

Highest recorded level of net lending in central government

Holding losses on securities reduced central government's net financial assets by more than NOK 64 billion in the third quarter of 2008. The modest decline in net financial assets is due to the record level of net lending in a quarter and holding losses on foreign assets being moderated due to the weakened Norwegian krone at the end of the quarter. Net lending was NOK 166 billion in the last quarter, which is up NOK 42 billion from the second quarter of 2008.

The central government's net financial investments abroad amounted to almost NOK 102 billion in the third quarter of 2008, which to a large extent led to a high level of net lending to the rest of the world. In the last quarter, Norway's net lending to the rest of the world was NOK 116 billion, which is a modest decline of NOK 7 billion from the second quarter of 2008.

Net financial assets abroad increased in the third quarter

Norway's net financial assets abroad were calculated at NOK 1 412 billion in the last quarter. This is up NOK 177 billion from the previous quarter, when net financial assets abroad were calculated at NOK 1 235 billion. In addition to high net lending, the fall in stock market prices on Oslo Stock Exchange and currency exchange rate developments increased net financial assets abroad. Foreign shareholders sold off quoted shares in the third quarter of 2008.