and selling the assets is to convert the bank into a public limited company. we saw some examples of this, too, in the swedish crisis, where some savings banks and other cooperative financial institutions had to be restructured. accounting issues need to be sorted out when one gets to the point where the government takes control, there are also more practical problems to deal with. this is a stage where the assets must be inventoried and where bad loans may need to be transferred to special asset management companies. one important aspect with regard to the feasibility of a quick and efficient solution is therefore the existence of clear regulations for evaluating assets and liabilities in a situation where the government intervenes. one particular question is how to deal with a situation where the government provides support for existing operations, for instance by injecting capital or providing a guarantee. the purpose of the intervention is to save the functions and not the bank as such. however, this action can have a positive effect on the value of the bank. in principle, it is reasonable that the value should reflect the value of the operations without reference to potential government support measures. additional legal issues so if all this has been put in place, is one home and dry? at the national level, yes. on condition of course that a number of basic conditions are met. the most fundamental requirement is that there is an effective legal system. it is not possible to close one ’ s eyes to the corruption in the legal apparatus in some countries, making it almost impossible to establish that a bank has gone bankrupt in such countries. if this is the case, the type of insolvency framework has little importance. the importance of reliable property rights and registers and the possibility to seize collateral cannot be emphasised strongly enough. finally, it is of course also important that the financial supervisory authorities dare to take difficult decisions. the people who work with these issues should therefore have sufficient legal protection. international contagion effects and the need for a code of conduct the international dimension has become more and more important. the financial systems are interlinked and there is a considerable risk of contagion effects. many banks are also a part of international groups with a more direct financial link between parts of the group. all of this of course creates a need to discuss how to manage banks in distress at an international level. the eu, with a single market for financial services and common regulations, has good reason to go further. much has been done in the area of coordination, with

public - sector investment. labor market conditions have improved somewhat on the whole. although the unemployment rate remains at a high level and employment growth is weak, overtime working hours have increased, and the ratio of job offers to job applications has continued its gradual rise. with respect to price developments, domestic wholesale prices ( adjusted for seasonal electricity rates ) seem to have stopped declining although downward pressures from competition with imports remain strong. this development was supported by the yen ’ s depreciation to date, the rise in crude oil prices and the improvement in domestic supply and demand conditions, particularly in construction - related goods. corporate service prices have declined, particularly in rents and leasing charges, but the year - to - year decrease has become smaller. consumer prices ( nationwide, excluding perishables ) have stayed slightly above the previous year ’ s level as commodity prices have continued to fall gradually and service prices have risen somewhat. growth in monetary aggregates, measured in terms of the year - to - year growth rate of m2 + cds average outstanding, has remained at 3. 0 - 4. 0 per cent, albeit with some fluctuations. regarding money market rates, the overnight call rate ( uncollateralized ) on the whole has stayed below the official discount rate of 0. 5 per cent. the 3 - month cd rate has moved at around 0. 5 per cent. meanwhile, with regard to the market ’ s interest rate expectations, 3 - month euro - yen futures declined at a somewhat brisk pace between the second half of july and autumn 1996, and have moved at around 0. 7 - 0. 9 per cent since september 1996. as the market ’ s expectations of higher interest rates receded, the long - term government bond yield has declined since mid - july 1996, and recorded a historical low of 2. 34 per cent in early december. recently, it has been moving at around 2. 4 per cent. with respect to bank lending rates, the short - term prime lending rate has remained at a record low level of 1. 625 per cent since september 1995. the long - term prime lending rate was lowered by a total of 0. 8 percentage points in september, october, and december to reach a record low of 2. 5 per cent, reflecting developments in long - term market rates. in these circumstances, short - term and long - term average contracted interest rates on new loans and discounts have moved at record low levels. on the stock exchange, the nikkei 225 stock average had