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Norges Bank's role in the event of liquidity crises in the financial sector

Financial crises can be costly for both government budgets and overall production. The authorities therefore attempt to prevent financial crises from arising. In Norway, the Ministry of Finance has the ultimate responsibility for financial stability, as part of its responsibility for economic policy. Kredittilsynet (the Financial Supervisory Authority) is responsible for supervising institutions, and has broad powers to intervene in the event of crises or potential crises. Central banks have traditionally had the role of lender of last resort, which means that the central bank can supply extraordinary liquidity to the individual bank or banking system when demand for liquidity cannot be met ...

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