The issue is, thus, how to attain this single interest rate level. Two requirements will have to be met for that purpose. The first requirement is that, in the context of a single monetary policy that will be implemented in a decentralised manner, there should be a very high degree of harmonisation of instruments and procedures. The EMI and central banks are working relentlessly to this aim. The second requirement lies in the integration of interbank markets and payment systems. As far as interbank markets are concerned, two factors should play a key role: •  the first factor relates to the various rules market operators have to abide by. These rules apply to counterparts, market makers, brokers, rating agencies and market enterprises such as clearing houses. They take the form of codes of conduct, regulations, master agreements and market standards. An appropriate degree of harmonisation of these market rules should be reached under the aegis of central banks and prudential authorities;  •  the second factor, the use of a single range of reference interest rates would guarantee the transparency of the euro money market. In this respect, short-term maturities are of special interest to central banks. This justifies that they intervene to some extent in the process of elaborating these indicators. As a matter of fact, the EMI has recently agreed that the ESCB should sponsor the computation of an overnight reference rate for the euro area.
Yet it is still appropriate to increase banks’ resilience to losses when systemic risk increases. This is the primary purpose of the countercyclical capital buffer, which is now being introduced in Norway. The countercyclical capital buffer The amendments to the Financial Institutions Act that were approved in summer include a number of new capital adequacy standards. There are new buffer requirements in addition to the minimum Common Equity Tier 1 (CET1) capital ratio requirement. Banks that do not meet the buffer requirements will face restrictions on distributing dividend and paying out bonuses. Chart: New CET1 capital requirements for Norwegian banks The capital conservation buffer is permanent and independent of systemic risk. The systemic risk buffer is designed to act as a buffer against more persistent systemic risk and will apply to all Norwegian banks. In addition, the largest banks will be subject to a separate capital buffer requirement. The Norwegian authorities are currently formulating criteria for designating systemically important financial institutions. The countercyclical capital buffer is designed to act as a buffer against systemic risk that varies over time. The buffer rate is to be  2  BIS central bankers’ speeches  assessed each quarter, and will normally be between 0 and 2.5 percent of banks’ riskweighted assets. The requirement will apply to all banks operating in Norway, eventually also branches of foreign banks. On 4 October, a new regulation relating to the countercyclical capital buffer was approved by the Government.