If nothing else is done, the banks will go on the defensive and cut their activities, thereby reducing the balance-sheet total to meet the capital requirements. Even creditworthy customers will find it difficult to obtain financing for sound projects. At the end of 2007, the excess solvency of the banking sector as a whole was around kr. 90 billion.
This would be sufficient to cover aggregate losses amounting to just over 3 per cent of all lending and guarantees. Losses of that magnitude are not unrealistic if we look at previous periods of recession. In addition, part of the banks' subordinated loan capital matures in 2009 and 2010 – approximately kr. 10 billion in each of these years.