##edibly their medium - term plans to restore fiscal sustainability, in order to limit upward pressure on their funding costs and to retain their ready access to global markets. that is important not only to deliver fiscal prudence, but also to avoid adverse spill - over to the rest of the financial system given their pivotal benchmark status. on the funding front, there are also heightened risks of crowding out. global refinancing needs are firmly skewed towards shorter term maturities. estimates differ, but bank and corporate bond redemptions hover around usd 3 to 4, 000 billon annually from 2010 to 2012, double the annual amount of the mid - 2000s. roll - over of government debt will come on top of those needs. leveraged borrowers such as high - yield companies also face refinancing pressure. and securitization markets are thawing only very slowly. overall, markets will need to refinance higher debt levels with lower average quality and with a reduced tolerance towards leverage, in a time window when support schemes will progressively unwind. such absorption pressure may well lead to higher and more volatile funding costs. therefore, it is now time that financial institutions and corporates engage proactively in lengthening their debt profile and tapping global markets in an orderly fashion given the risk that they may otherwise be forced to raise funds under less attractive terms. amidst these challenges, restoring a well functioning market - based economy also requires exiting from the exceptional financial sector support measures introduced since 2007. clearly, the timing, speed and modalities of exit involve important trade - offs, and judgment will need to be used. implementing exit strategies will require striking an uneasy balance between exiting too early and too late. this underscores how important it is that we resolve the regulatory issues in front of us, which will be part and parcel of our ability to exit this crisis with confidence in the resilience of our financial system. bolstering the resilience of the financial system is a broad project encompassing a considerable number of related measures. it involves multiple layers of policy authorities across countries and sectors. and it requires coordination and a joined - up international response, both for making our policies effective and for establishing a level playing field. driving forward a coordinated global regulatory response has been the key role of the g20 leaders and of the financial stability board, which i have the honour to chair. much policy development has been achieved – more than meets the eye – that when implemented, will

svein gjedrem : financial crisis – lessons from the nordic experience article by mr svein gjedrem, governor of norges bank ( central bank of norway ), in the financial times, 3 february 2009. * * * with the financial crisis gathering strength and spreading to the real economy, it is instructive to learn the lessons from the nordic crisis of the mid - 1990s. there are some important similarities today : but also some important differences. the financial strength of the banks, and hence their ability to continue to supply a steady flow of financing, can be bolstered in either of two ways : by injecting capital ; or by removing highrisk loans from the banks ’ balance sheets – and in turn creating a “ bad bank ”. in the nordic banking crisis 20 years ago, we did both, and learned three important lessons : first, government crisis resolution measures do not have to be costly for the taxpayer. the state injected equity capital, while private share capital was written down on the basis of a realistic assessment of loan losses. this ensured that the equity capital injected by the state could benefit from upside opportunities. in norway, the state assumed 100 per cent ownership of the three largest banks. the board of directors and senior management in each bank were replaced. then, in the years following the crisis, the state gradually sold its shares in the nationalised banks – at a profit. second, it is not always necessary to take the bad loans off the banks ’ balance sheets. in norway, the banks dealt with the problem loans themselves, and there is good reason to try to achieve this, where possible : the originating banks themselves are the best placed to deal with the problem loans. however, this presupposes that the problem loans account for only a limited proportion of total lending, so that the banks are able to continue to operate normally. sweden and finland established a “ bad bank ” that took over the high - risk loans. but this was in most cases done only after the state had nationalised the banks and was thereby able to control the kinds of loans that were transferred to the “ bad bank ”. third, banking crises do not need to be prolonged. in the nordic economies the prompt and extensive writing down of problem loans and recapitalisation of the banks limited the economic downturn, which lasted only around a few years. this experience stands in contrast to that of japan, where loan losses were recognised too slowly, with substantial and decade