Norway is part of the European Economic Area, and EU regulations are thus applicable in this country. Within the remaining national discretion, Norwegian regulations are laid down by the Ministry of Finance, and implemented by the Financial Supervisory Authority. But Norges Bank aims to be an active advisor on these issues. Our work on macroprudential supervision provides insights that we wish to share with other supervisory authorities. The second component of macroprudential policies consists of short and medium term measures to alleviate the effects from the procyclical behaviour of financial institutions. There are two macroprudential aspect of procyclicality. It is the common exposures of a group of  BIS Review 112/2010  1  financial institutions. And it is the interconnectivity of financial institutions through trading and credit relationships. Common exposures are probably the most important of these interdependencies for crisis generation. Individual institutions can look perfectly healthy even when vulnerabilities are building up on the systemic level. The prime example of this phenomenon is naturally lending stimulating a price bubble in the property market. Developing time-varying macroprudential policies is not straightforward. The interest rate policy targets the inflation rate, and cannot always be set as would be appropriate for asset prices. There might be conflicting targets. We should thus be looking for new instruments. As you are certainly aware, most of the macroprudential policy instruments that have been proposed are the same as those already being used for microprudential purposes.

Monetary policy has taken a number of standard and non-standard measures which have resulted in historically low interest rates. Hence the assessment for the limited room for further adjustment measures. Given the expected low inflationary pressures, the monetary policy stance, in general, will depend on the developments in the external sector. Hence, the main point that needs to be highlighted, and which is aimed at supporting long-term growth, are the structural reforms. In the recent period, Macedonia has been making great efforts to improve the business climate, which is being confirmed by the business indicators (Doing Business). In this regard, Macedonia is ranked 30th place for 2015, which is an improvement of six positions relative to 2013. Improved ranking is observed in all categories, with the exception of the segments “obtaining credit” and “procedures for obtaining building permits”. However, there are segments where there is room for further improvement – procedure for obtaining building permits, access to electricity, registration of property, implementation of contracts. The latest Transition Report of the EBRD also refers to the areas where greater efforts are required. In fact, there are few segments where there is complete convergence to the setup in the developed market economies. The energy sector, infrastructure and financial sector (particularly in the part of providing additional funding through the capital market) are highlighted areas where further reforms are needed. The last aspect, i.e. the deepening of the capital market is a very important element in the growth pattern.