Considering that PC and Internet coverage in Norway is high, conditions should be favourable for developments in this area. In this connection, it will also be exciting to see how banks meet new demands for payment services related to increased trading over the Internet. Based on the above, I would conclude that efficiency in the Norwegian payment system has improved considerably in the 1990s. Factors behind these developments The transition to electronic payment instruments is obviously closely connected with the spread of information technology in Norway in the 1990s. Nevertheless, it is important to point out that the correlation between new technology and an increase in efficiency is not automatic. Efficiency is the result of interaction between technology, institutions and users. The following three prerequisites must be in place for an efficient use of new technology: First, system participants must be able to make use of the new technology. Coordination of the Norwegian payment system has been an important factor behind the swift adoption of new electronic payment services by the industry. Second, it is imperative that customers gain quick and moderately BIS Review 7/2000  6  priced access to the new payment services, such as has been the case with the spread of EFTPOS terminals.7 And third - and perhaps most importantly - the payment system must encourage the use of (cost-) effective payment instruments. The public must face correct incentives if their payment habits are to be changed in the right direction.

In response to the unfolding crisis, Governments and central banks adopted aggressive measures, including fiscal stimulus packages, bank recapitalisations and the provision of government guarantees, and injections of huge amounts of liquidity. It was also important to critically review the legislative and regulatory framework in order to pre-empt the recurrence of, or at least better manage, similar situations. The de Larosière Report, mandated by the European Commission (EC) and published in February 2009, set the scenario for reforms at a European level. Similar work was undertaken at the global level by the Financial Stability Board (FSB) and by the Basel Committee on Banking Supervision (BCBS). This work has clearly showed that the Basel II capital requirements did not ensure an adequate buffer to sustain an institution on a going concern basis. Confidence in regulatory capital waned and the market started to assess bank robustness using other tools. Liquidity measurement, for example, had been largely excluded from Basel II. Some internal risk models were based on short-term statistical horizons that failed to capture periods of stress. The potential of the regime to exert a strong pro-cyclical bias also became manifest. In its efforts to address identified weaknesses, the BCBS issued two consultation documents in December 2009, one on “Strengthening the resilience of the banking sector” and another on an “International framework for liquidity risk measurement, standards and monitoring”. Concurrently, the EC is proposing amendments to the Capital Requirements Directive (CRD) in order to align it with the recommendations of the BCBS.