Long-term saving A visible difference from the other Nordic countries is that the Norwegian state has capital savings in the Government Petroleum Fund. The Fund has grown rapidly in recent years, and we expect continued strong growth in the years ahead. The National Budget for 2006 presents projections for the period to 2009. The projections are based on the assumption that the price of oil will fall from the current level to NOK 260 per barrel. This is lower than long-term futures prices but is a high price estimate in relation to historical prices. 8  Productivity growth in service industries is compared here. There may be sources of error due to choice of method in the production of national accounts figures, but the main impression can also be supported by the use of other sources. Comparing developments in productivity in manufacturing is of little relevance since the structure of this industry varies widely among the Nordic countries. 9  Seniorpolitikk og IA-avtalens delmål om å øke pensjoneringsalderen. (Norwegian only) Report no. 04/2005. National Insurance Administration. 4/8  We know little about future oil prices. The chart shows actual developments since 1960 and the projections in the last Long-Term Programmes and in the National Budget for 2006. We see that considerable weight has systematically been given to the prevailing oil price when making projections. Just as systematically, there have been surprises that have resulted in a different path for the actual oil price.

14  Nyberg (2010) provides more discussion of macroprudential regulation and regulation reform. BIS Review 16/2010  7  significant social costs. I find it helpful to conceptually distinguish financial-stability policy from monetary policy. Different economic policies and policy areas, such as fiscal policy, labor market policy, structural policies to improve competition, etc., can be distinguished according to their objectives, the policy instruments that are suitable for achieving the objectives, and the authority or authorities controlling the instruments and responsible for achieving the objectives. Monetary policy in the form of flexible inflation targeting has the objective of stabilizing both inflation around the inflation target and resource utilization around a normal level. The suitable instruments are under normal circumstances the policy rate and communication, including possibly a published policy-rate path and a forecast of inflation and the real economy. In times of crisis, as we have seen during the current crisis, other more unconventional instruments can be used, such as fixed-rate lending at longer maturities, asset purchases and foreign-exchange intervention to prevent currency appreciation. The authority responsible for monetary policy is typically the central bank. Financial-stability policy has the objective of maintaining or promoting financial stability. The available instruments are under normal circumstances supervision, regulation and financialstability reports with analyses and leading indicators that may provide early warnings of stability threats. In times of crisis, there are instruments such as lending of last resort, variable-rate lending at longer maturities, special resolution regimes for financial firms in trouble, government capital injections and so forth.