Thus far, foreign branches in Norway have primarily focused on the largest enterprises and financial market segments that demand more advanced services. As the euro gradually gains a foothold in the Norwegian business sector, the Norwegian market may prove to be of greater interest to foreign banks. Nor can we disregard the possibility that mergers and acquisitions in the Norwegian business sector – which may partly be perceived as a response to consolidation in the business sector in the euro area – will lead to a situation whereby a larger number of Norwegian enterprises move into the “division” where foreign competition is strongest. Norwegian enterprises with close ties to the euro area will also demand a wide range of euro services from their banks. For this reason, foreign banks will probably compete more intensely with Norwegian banks in the future. Technological advances, including the development of new channels of distribution, will reinforce this tendency. Substantial overcapacity in the financial sector in European countries, particularly in traditional banking, has spurred the need for enhancing efficiency and consolidation. Over the last couple of years we have seen a considerable increase in the number of mergers and acquisitions in Europe, with mergers taking place both within and across national borders. The introduction of a single European currency has probably been an important catalyst in this process. Mergers and acquisitions create entities with ambitions, financial strength and, not least, a range of services well designed to compete on international markets. This points to increasing competition across national borders.

For an independent central bank to be perceived as legitimate in a democracy, it must be granted a clear mandate against which its performance can be assessed. However, the environment in which central banks operate is highly complex, and conditions can change rapidly. For this reason, mandates usually only sketch out a framework for central banks’ operations. This gives them much-needed flexibility in difficult situations. As a counterweight to its independence, a central bank has a duty to report on its actions, and the results. Indeed, the SNB has regularly provided detailed reports on matters relating to both monetary policy and financial stability. For example, it has explained the rationale behind deciding to discontinue the minimum exchange rate or introduce the negative interest rate, and how these measures have helped it to fulfil its mandate. As regards financial stability, the fact that macroprudential instruments often have powerful distribution effects speaks against handing over the entire responsibility for such instruments to the central bank. In contrast to monetary policy, these measures are sometimes targeted at specific sectors and groups, and thus also have fiscal implications. In Switzerland, macroprudential tasks have therefore been divided up between the government, the financial market supervisory authority and the SNB. The SNB is responsible for assessing the systemic importance of banks and financial market infrastructures, and plays a key role in the deployment of the countercyclical capital buffer. 1/1  BIS central bankers' speeches