The Norwegian banking crisis can be split into two parts. In the first part of the crisis, 1987 to 1990, it was mainly smaller banks that suffered increased losses on loans and weaker operating results. The Savings Banks' Guarantee Fund and the Commercial Banks' Guarantee Fund handled most of these banks through support and equity contributions. A number of banks were merged. In total, more than 20 banks received support from the two guarantee funds. Norion Bank was the only bank that was placed under public administration and wound up as a result of the crisis, but neither did depositors lose money here.

Towards the end of 1990, problems also appeared at the larger banks and it was widely recognized that the crisis was systemic. This second part of the banking crisis was broad and deep, and strongly influenced by the development in the Norwegian economy; high real interest rates and falling property prices. The guarantee funds were depleted. The government therefore created the Government Bank Insurance Fund, which was to provide funding to the two guarantee funds, which could then still contribute financially to failing banks. The funding was repaid with interest in the years after the crisis.

The crisis peaked in the autumn of 1991 when both the second largest and fourth largest banks in Norway became insolvent and the largest bank had serious problems. The Government Bank Insurance Fund was then given the opportunity to contribute by transferring capital directly to the banks. In addition, The Government Bank Investment Fund was created to invest in banks that were not in an acute crisis. Through the two government arrangements, the government took over the shares in the three largest commercial banks. The Government Bank Insurance Fund and the Government Bank Investment Fund were wound up in 2002 and 2004 respectively.