However, Norges Bank’s tasks have otherwise varied over time. We manage the Norwegian oil fund, which was a natural step in light of Norges Bank’s management of foreign exchange reserves. The fund will not, however, be one of the topics of my speech today. 3 The origins of Norges Bank Norges Bank was established in 1816 as a limited liability company, privately owned but under the control of the Storting. It was Norway’s first bank. The Napoleonic Wars had been costly for Denmark and eventually led to hyperinflation. In order to secure confidence in the new specie daler, Norges Bank had to be independent. 4 The intention was to make it difficult  2  A. Cukierman (2008), “Central Bank Independence and Monetary Policymaking Institutions – Past, Present and Future”, European Journal of Political Economy, 24 pp 722–36. 3  For a discussion of the Government Pension Fund Global, see Gjedrem (2010): “Perspectives on managing the Government Pension Fund Global”, lecture at the Norwegian Polytechnic Society, 2 November 2010. 4  See also Carsten Smith (1980):”Bankrett og statsstyre” [Banking law and public governance], p. 39: “Det klassiske system internasjonalt sett har vært å knytte penge- og kredittpolitikken til en selvstendig stillet sentralbank [The classic system internationally has been to assign monetary and credit policy to an independent central bank].” Universitetsforlaget. 2  BIS Review 154/2010  for the government and the Storting to influence the central bank. The Bank’s headquarters were located in Trondheim, a 12-day journey from the capital.

Prudential regulations have been tightened in response to rapid credit growth and intensified competition in the banking system. We are working to ensure proper supervision over the parts of the Albanian financial sector that are outside the Bank of Albania’s jurisdiction, while trying to preserve fair competition across the sector. The Bank of Albania is assisting the MoF to improve its debt-management capacities. I believe our hard work will be reflected in a satisfactory rating of our sovereign debt, due to be carried out early next year. The competence, credibility and professionalism of our monetary policy provide necessary conditions to support and guarantee achievement of economic goals and successfully fulfill economic convergence toward ERM II preconditions. However, our achievements will not last in the absence of a careful fiscal policy and conservative fiscal expansion. The Bank of Albania is not the only major economic player. Therefore, we must find and implement clear anchors to guarantee the compliance of other players’ economic policies. In this respect, we can transform ERM II preconditions into an important foreign anchor to preserve the credibility of our reforms in the future. As a pre-accession country, Albania will be facing ERM II problems in the medium term. We are well aware of the difficult road ahead and the challenges we will face. Nevertheless, we remain committed toward economic and legal reforms considering it as a natural approach toward EU accession process. ***  BIS Review 1/2007  3  References Begg, B., Einchengreen, B., Halpern, L., Hagen, J. Wyplosz, CH. (2002).