Risk factors related to domestic conditions Events that have taken place abroad are actually more a liquidity crisis rooted in uncertainty about the valuation of assets and the distribution of losses among institutions than a crisis due to the size of the losses themselves. The credit risk for the more senior tranches of subprime CDOs is probably manageable. But we should not forget credit risk in the traditional sense when we assess risk elements. Loans to Norwegian households and enterprises account for approximately 70 per cent of banks’ balance sheets. Risk factors related to these customer groups are therefore very important to financial stability in Norway. Households Strong household debt growth and the sharp rise in house prices constitute a risk factor with regard to financial stability in Norway. Household debt growth has been high since 2000, primarily driven by low interest rates and a sharp rise in house prices and income. Loans secured on dwellings have shown high and increasing growth. Strong competition between banks has pushed down lending margins. The new capital adequacy rules (Basel II), which involve a substantial reduction in risk weights for mortgages, may also have contributed to the rise in mortgage growth and the decline in lending margins. Real house prices, deflated by consumer prices, building costs and house rents, are historically high. Deflated by disposable income, however, house prices have only risen moderately over the past ten years. In recent months, there have been signs of a slackening in the housing market. The rise in house prices has slowed.

Marzunisham Omar: Globalisation - contents and discontents Welcoming remarks by Mr Marzunisham Omar, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the World Bank International Conference "Globalisation: Contents and Discontents", Kuala Lumpur, 15 January 2019. * * * Globalisation has contributed to the world’s unprecedented economic growth and prosperity. Global output has increased more than six-fold in the past 50 years. A billion people have been lifted from abject poverty in just one generation. Although the gains from globalisation are vast and widely-acknowledged, its fruits have not been equitably shared by all. The growing sense of discontent and injustice among the marginalised have led to a retreat from globalisation in the recent period. This reminds me of what the late Kofi Annan once said: “Globalisation is a fact of life. But I believe we have underestimated its fragility”. Globalisation has, and will always, exist in a tension. The challenge is finding the right balance between various, and often contrary, objectives. The retreat from global integration and multilateralism today serves as a wake-up call for us to reflect on the realities of globalisation, to re-examine our policy choices and to recalibrate our way forward. With rapid technological advancements becoming an increasingly polarising force, the sociopolitical and economic issues at hand are more pressing than ever. It is my great pleasure to welcome you today to the World Bank International Conference on ‘Globalisation: Contents and Discontents’. Thank you to the World Bank for giving me the opportunity to say a few words.