early as the year 869, vikings on their way home were able to steer their ships towards the mouth of the hardangerfjord guided by a bonfire built on a clifftop cairn. the vikings were not only plunderers and pillagers, but boatbuilders and, not least, skilled seamen. they built norway ’ s reputation as europe ’ s leading sea power, while the sea took them out into the world and into contact with other cultures. the vikings were also traders, and they knew that the sea was a versatile resource. ever since the end of the ice age, when the glaciers retreated and the very first norwegians made their homes near the seashore, we have harvested food from the sea. but we also learned early on that fish was valuable as a form of currency. as early as in the medieval era, dried cod from norway was a sought - after product further south in europe. with their ships laden with dried cod, the vikings were able to trade the fish for beautiful cloth, exotic spices and precious metals. chart : the 200 - krone banknote ( the cod ) fishing has been a key source of income and an integral part of the coastal culture in norway for 1 / 4 bis central bankers'speeches centuries. for many people, fish has been a crucial part of their diet. some crops do not thrive in norway ’ s climate of long winters and cool summers. cod and herring, trout and salmon, on the other hand, have flourished. sturdy boats designed to cope with the rough waves and unpredictable winds of the open sea enabled us to bring the catch to shore. and before more modern transportation routes became available, cargo ships were needed to transport the catch to customers at home and abroad. chart : distribution of exports 1835 the possibility of storing and transporting fish over long distances generated jobs and foreign exchange income. in 1835, 39 percent of norway ’ s export revenues came from the sale of fish. shipping provided 25 percent of norway ’ s export revenues. consequently, it has always been important for the country ’ s economy to ensure market access for norwegian seafood exports, as was the case during norway ’ s prohibition period in the 1920s. a referendum held in 1919 resulted in a majority vote to ban the import and sale of fortified wines and spirits. however, the ban on fortified wine imports soon had to be lifted. fortified wine producers in southern europe were important recipients of norwegian fish. in the trade war that ensued, portugal retaliated by imposing

svein gjedrem : government intervention and moral hazard in the financial sector opening address by mr svein gjedrem, governor of norges bank ( central bank of norway ), at the conference “ government intervention and moral hazard in the financial sector ”, oslo, 2 september 2010. * * * it is my pleasure to wish the participants of this research conference welcome to oslo and norges bank. i also welcome participants to our annual financial industry day. this year we have chosen to make that event an integrated part of the research conference. we believe the topic of this research conference should be of particular interest to practitioners. we have also put together the program for this first day of the conference with practitioners in mind. the topic that you will be discussing during the conference is very important for our work at the norges bank. moral hazard in the financial sector is a main concern for the design of government regulation and for the planning of government intervention in periods of financial distress. norges bank is not the bank supervisor in this country. the financial supervisory authority is a separate institution. but norges bank does have a general responsibility for the smooth functioning of the financial system : we have what are now being termed macroprudential responsibilities. we have been doing macroprudential supervision and published our findings in our financial stability reports since 1997. we were thus one of the first central banks to publish such reports. our semi - annual reports have been gradually improved over time. we believe that they are now important contributions to financial supervisory work in norway. we are concentrating our analyses on the macro developments of the financial industry and the macro risks that the industry is facing. for this purpose we are using data bases with detailed information on banks, non - financial firms and households. this gives us an intimate knowledge of the health of the banks and of their customers. macroprudential policies have at least two components. the most important is arguably the long term design of the regulatory framework for the financial sector. ideally we wish to build institutional stabilizers that will prevent financial boom and bust cycles, or at least make them less frequent. one example of such a stabilizer would be a capital buffer requirement above the minimum. a buffer requirement, combined with automatic dividend restrictions for institutions that do not meet the requirement, will most likely become part of the new international regulatory regime. another example is leverage ratio limits that will reduce the scope for expanding financial activities on a very small capital base. a third example is