##2k problem. this is reflected in money market rates. norges bank ’ s instruments are effective in terms of rapidly supplying large quantities of liquidity if this should prove necessary. the central bank will supply sufficient liquidity to the money market in connection with the year 2000, as we normally do throughout the year. should it prove necessary to depart from the collateral requirement, a risk premium will be applied. 8. conclusion to sum up and conclude : norges bank places emphasis on promoting financial stability. as a result of the banking crisis, norges bank has strengthened its surveillance of the financial sector. in cooperation with other public authorities in norway and internationally, we will contribute to developing framework conditions for financial institutions and financial markets that reduce the likelihood of future crises. a priority task is to enhance the resilience of the payment and settlement system in the face of a crisis situation. it is still likely that financial crises will recur. in the last 20 years, three quarters of imf member countries have experienced a banking crisis. not even a perfectly healthy macroeconomic policy and the development of an effective supervisory system constitute a guarantee against crises if the banks fail to exercise sound banking. herd mentality and over - optimism that are rapidly reversed seem to be a recurrent phenomenon. systems and contingency schemes are therefore required to handle crises in order to limit the adverse effects and reduce the risk of recurrence. the most important preventive measure is to promote sound banking. subject to the statutory rules applying, the responsibility for sound banking primarily rests with the banks themselves.

in the economy. we illustrate the uncertainty by fan charts. growth in the norwegian economy has been higher than we assumed a year ago. this reflects a large supply of labour from other countries and high productivity growth, but also increased use of domestic labour and other resources. it is likely that capacity utilisation will have to decline to prevent inflation from becoming too high. see norges bank watch 2008 for a critical view on measures on capacity utilisation. unemployment has declined considerably and is now historically low. the increase in employment has been accompanied by a decrease in wage - earners ’ share of corporate earnings. developments must be viewed in the context of the many positive factors that have been at work in the business sector. the impact of a number of these factors may now be diminishing. it is not likely that the improvement in norway ’ s terms of trade will simply continue. productivity growth seems to be slowing and wage growth is picking up. wage - earners ’ share of value added is therefore rising again, and this will probably curb labour demand ahead. a number of other factors may also contribute to reducing capacity utilisation even though petroleum investment remains high and public expenditure is growing at a fast pace. there are signs of a cooling housing market throughout the country. house price inflation peaked about a year ago. for norway as a whole, house prices have remained approximately unchanged over the past twelve months. there are nevertheless regional differences in house prices. house prices are rising fastest in rogaland, and falling fastest in hordaland and the inland regions. housing investment gradually slackened through 2007, reflecting higher interest rates, rising inventories of unsold homes and increased construction costs. several large residential construction projects have now been shelved. we also expect commercial property starts to show a gradual decline. developments in capacity utilisation abroad have an impact on capacity utilisation at home. after several years of strong growth in the world economy, growth is slowing in a number of countries. growth in the us seems to have come to a halt, and there are fears of a downturn. growth is also slackening in many western european countries, but emerging economies such as china and india are still growing at a brisk pace. inflation is picking up in many countries due to rising food and energy prices. central bank key rates have been cut in the us and the uk to address deteriorating growth prospects. in the euro area the interest rate has been kept unchanged, while the swedish central bank has