Annual company accounts, however, are to be recorded in Norwegian kroner and in the Norwegian language unless otherwise provided for by regulation or separate decisions by the Ministry of Finance. The annual report must be written in Norwegian. Under certain circumstances, consolidated accounts may be recorded in a foreign currency. Accounts expressed in a foreign currency may also be published as a supplement to accounts in Norwegian kroner. A third question was whether it should be possible to quote financial instruments traded on the Oslo Stock Exchange in euros and, if so, whether this would require changes in stock exchange legislation. A broadly based committee appointed by the Oslo Stock Exchange has addressed this question. The committee concluded that, although this situation may change, there is little interest in the Norwegian securities market in quotations and settlements in euros. The committee found no legal obstacles to quotations and settlements in euros. Consequently, the Ministry of Finance has not found a basis for recommending changes to stock exchange rules. The Ministry of Finance has also considered whether conversion to euros should be regarded as realisation within the interpretation of tax legislation. The Ministry has concluded that the parties’ positions are not actually altered by conversion. The Ministry therefore maintains that assets and liabilities recorded in the currency of an EMU country cannot be considered as realised after that currency was replaced by the euro.

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.