With Asian official foreign currency reserves exceeding USD2 trillion, and Middle East oil revenues exceeding USD1 trillion since 2000, the management of surplus savings and reserves in both regions will offer significant investment opportunities. Besides the institutional pool of wealth, the rapidly expanding middle class in both regions is a further trend sustaining the high savings rate and the increased demand for more sophisticated including consumer finance and wealth management. In Asia alone, we now have more than 2.4 million high net worth individuals 5 , not far behind the US with 2.9 million and Europe with 2.8 million, and these Asian individuals control an estimated amount of USD7.2 trillion financial assets. The size of this group in Asia is estimated to be increasing at 7% per year, second only to those in the Middle East, numbering 300,000 and growing at 9% per year. Traditionally, investors in Asia and the Middle East have looked to the developed Western markets to meet their investment needs, in view of the more developed financial markets and the range of asset classes. Increasingly however, there is growing interest and search for improved returns on investment in other parts of the world. This has been a global phenomenon for some years now, characterised by excess liquidity and low yields in the traditional markets. The New Silk Road creates linkages that build on the comparative advantages between Asia and the Middle East Ladies and Gentlemen, Historically, trade and investment in Asia and the Middle East has been linked to the developed economies.

Household saving is now rising rapidly from a negative level. Banks’ willingness to lend to households has stabilised after the tightening last autumn. However, they are still tightening lending to enterprises. Banks are increasing their margins and fees, and require higher equity capital levels of corporate loan applicants. At the same time, funding in the securities market is expensive. The Government Bond Fund facilitates funding primarily for enterprises with a moderate or high credit rating. As a result of extensive official measures the banks now have fairly good access to shortterm and medium-term funding. Norges Bank has supplied ample short-term liquidity to banks. Loans with longer maturities have been widely used, and an increasing number of banks are participating in the credit swap arrangement. We see here an overview of various banks’ and mortgage companies’ use of this arrangement as a percentage of their total assets. So far, there are 15 banks and mortgage companies participating in the arrangement. Several participants report that the credit swap arrangement is a good source of funding in today’s market. The government receives, which is reasonable, compensation for making Treasury notes available. The rate has been in the order of a half per cent. With a large volume of Treasury notes in circulation, we see the possibility of the formation of an interbank market for loans in NOK, where government securities are used as collateral. In the event, this would provide the Norwegian money market with greater insulation from the shifting weather conditions in the US dollar market.