A large part of the petroleum production is exported and the bulk of the revenues saved in a sovereign wealth fund. 6 A strong fiscal position, along with a well anchored inflation targeting regime, allowed us to use both fiscal and monetary policy actively during the recent international financial crisis. The unemployment rate has stayed around and below four percent during recent years, and the inflation rate has been low and stable. This picture seems rosy, but there are concerns: property prices have risen sharply over the last 20 years and households are heavily indebted. Norges Bank was given a formal inflation target for its monetary policy in March 2001. The operational target of monetary policy is annual consumer price inflation of close to 2.5 percent over time. Monetary policy shall also contribute to stabilising output and employment. In this respect, the inflation targeting regime is flexible. Norges Bank’s Executive Board comprises seven members, including the Governor, Deputy Governor and five external members. The Board decides collectively on the key policy rate, normally six times a year. 7 Our Monetary Policy Report with financial stability assessment is published on a quarterly basis. Analyses and discussions on interest rate decisions are reflected in the Report. Together with press conferences after our monetary policy meetings, the Report is the main channel for our communication of monetary policy. Since 2013, the Report also includes an evaluation of financial stability conditions, which is also used as a background for Norges Bank’s recommendation on a countercyclical capital buffer for banks.

Fraud, unethical practices, and monopolistic and unfair practices would, if left unchecked, adversely affect public opinion and confidence in the banking system, with consequences on the financial performance of individual institutions. Indeed, in order to preserve corporate reputation and sustain public confidence, banking institutions must be sensitive to the impact of their policies and practices on their customers and other stakeholders. It is, therefore, in the interest of the industry to collectively ensure that public confidence in the system is maintained at all times. BIS Review 10/2005  3  Ladies and Gentlemen, The recent issue on the fees and charges imposed by the banking institutions received significant attention by the public. Bank Negara Malaysia's policy has been to gradually deregulate the rules on fees and charges, as a way to drive improvement in the performance of banking institutions and promote innovation. Nevertheless, the flexibility given needs to be judiciously enforced so as not to result in any erosion of public confidence in the banking sector. To protect consumer interest, Bank Negara Malaysia will balance the competing expectations of banking institutions and consumers. While it is recognised that enhancements to products and delivery channels involve substantial investments, any realignment to the pricing structures on products and services need to be supported by the adequate costing and justification that also takes into account cost savings. More importantly, it must be accompanied by improvements in service quality.