Norwegian banks have only 500 kroner in cash per inhabitant

Cash banknotes kronerPhoto: Ole Berg-Rusten / NTB

Out of the total deposits of NOK 2,448 billion in Norwegian banks, only 0.1%, or NOK 2.7 billion, is available for exchange into cash.

While the amount of bank deposits increases every year in line with credit growth, the amount of cash has been declining slightly, newspaper Finansavisen writes.

According to Statistics Norway (SSB), there were NOK 2.448 billion in bank deposits as of November 2020. 

At the same time, there was NOK 37.6 billion in cash. Out of the total, banks had only 2.7 billion. The rest was in the hands of the public and companies.

If a situation were to arise that significantly increased the demand for cash among the public, the banks would quickly run out of cash – at least in the first instance.

Five deposits

According to Norges Bank, the central bank has five deposits, “all of which have a significant stock of banknotes and coins.” 

Should a situation arise where the banks have to ask the central bank for more cash, they would increase the amount of cash in circulation beyond the NOK 37.6 billion that exist today.

The banks’ cash holdings are lower today than they were in 2016 when Norges Bank and Finanstilsynet pointed out to the Ministry of Finance that the banks’ cash situation was not good enough. 

At that time, the banks’ cash holdings were around NOK 4 billion.

Source: © NTB Scanpix / #Norway Today / #NorwayTodayNews

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