Norges Bank governor Øystein Olsen believes the imposition of a countercyclical capital buffer in Norway would likely warrant a lower benchmark interest rate, as banks would react to more stringent capital requirements by restricting the supply of credit.

Olsen directly addressed the interaction between monetary and macro-prudential policy in a speech at the Norwegian Centre for Monetary Economics today, after the central bank was handed an advisory role in the conduct of macro-prudential policy