This suggests that there is room for somewhat stronger growth in the economy without pressures on real resources emerging. The low inflation environment we have witnessed in Norway lately reflects global phenomena and trends. Globalisation, new technology and increased trade among countries are key forces affecting the Norwegian economy, in addition to exchange rate developments. A global financial market Cross-border capital flows have increased considerably in recent decades. Bond markets have moved more in tandem, particularly since the mid-1990s. This also applies to equity markets. Investors are increasingly spreading their investments across countries. They are diversifying risk, and seeking high returns. In parallel, governments, banks and companies are issuing more debt externally. Currency trading has increased markedly since the 1980s. This trend was reversed when the number of currencies was reduced due to the introduction of the euro. Large trading volumes enhance market liquidity. The growth in currency trading reflects an increase in portfolio investment, higher foreign direct investment and growth in world trade. The forward exchange and options market have expanded in recent years. A deeper market reduces transaction costs, and it is easier to find counterparties. This has provided companies with greater scope for hedging against foreign exchange risk. The use of instruments that reduce the risk associated with a floating krone is also increasing in Norway. A considerably larger portion of credit in other countries is now channelled via the bond market. Less risk is being accumulated in banking systems.

Corporate governance regulations and best practices We have seen considerable reform in the regulations and codes of corporate governance, as well as the actual practice of corporate governance in the Asian Roundtable economies. For instance, Pakistan, Chinese Taipei and Thailand all adopted new codes in 2002, while new or updated codes have been adopted in Bangladesh, Hong Kong, Indonesia and Korea since 2003. This has yielded visible benefits. There is greater clarity in many Asian economies regarding the fiduciary duties of the directors of listed companies. There has also been progress made in terms of more independent directors being introduced to the boards of listed companies in the Asian region . Accounting rules have also been beefed up across the region. Some of the Asian Roundtable countries have made significant moves towards convergence with international standards and best practices on accounting. China, India, Indonesia and Philippines, have for example revised their accounting standards to bring them more in line with international standards. Corporate governance in Singapore Corporate governance in Singapore has similarly undergone evolution. I shall leave it to the speakers from the Singapore Institute of Directors and the Singapore Exchange to share on these more fully. I will talk briefly instead about our overall approach to corporate governance. Regulatory framework – balance of mandatory rules and best practices First, let me touch on the regulatory framework for corporate governance. In recent years, we have moved away from a merit-based approach towards a disclosure-based approach.