At the same time, authorities in a number of Asian countries initiated a wide range of fundamental enhancements to financial system infrastructure, including strengthening prudential regulation and supervision, bolstering bankruptcy and collateral recovery processes, and improving disclosure requirements. With the full implementation of these measures, standards in Asia will closely approximate international norms. Reform fatigue But with the pace of growth slowing, reform fatigue represents a significant risk to sustained recovery. Crises entail wrenching change and costly solutions that are difficult to bear over a long period. The desire for a return to "normalcy" is strong. Under these conditions, it is human nature to overemphasize positive information, tire of reform, declare victory and move on. These impulses might be expected to be particularly powerful against the backdrop of years of strong and unbroken Asian economic growth. It is no wonder therefore that governments the world over initially tend to underestimate the size of problems, underfund solutions, and postpone loss recognition. It also is not surprising that, given the  BIS Review 10/2001  1  many obstacles involved, authorities may be tempted to prematurely mark a case closed, particularly with the advent of economic recovery. In the new international financial landscape, a government’s perceived ability to deliver on the policy front is crucial, preferably based on coherent, comprehensive, and achievable objectives. Confidence in a government’s ability to deliver is nurtured both by actions and by communication. Complacency and reform backsliding, however, create the dangerous potential for a shift in expectations.

Information about the state of the Norwegian economy is available earlier than information provided by official statistics, and it is useful to have closer contact with the labour market and business and industry throughout the country. According to the latest reports from the regional network, the situation in Region North-West is very favourable. Enterprises in the network report that employment is high and profitability is rising in tandem with the level of activity. This applies both to manufacturing for the domestic market and to the export industry. The construction industry will soon reach capacity limits. Enterprises in the region envisage a slight rise in prices in the period ahead. Inflation decelerated markedly from summer 2003 and continued to fall in the beginning of 2004. Consumer price inflation has subsequently picked up, albeit at a gentle pace. In September, the year-on-year rise in consumer prices adjusted for tax changes and excluding energy products (CPIATE) was 1.3 per cent. Adjusted for the interest rate’s direct effect on house rents, the year-on-year rise in the CPI-ATE is estimated at 1.5 per cent in September. The CPI rose by 2.0 per cent in the same period. 2/7  Prices for domestically produced goods and services rose by 2.0 per cent in the twelve months to September this year. Higher capacity utilisation is providing the basis for higher margins in some industries. Service prices, which showed little rise last year, have increased again this year.