bonds. over the past year, the average duration of our strategic reference index has increased by more than half a year. in our management of the fund, we have chosen not to lock in low yields for a prolonged period and the fund has a shorter duration than the index. • third, the index providers exclude certain countries and segments in the construction of the indices for different reasons. as a result, the indices do not represent the full set of opportunities for an investor such as the fund. to give the fund higher exposure to global economic activity, we invest in some emerging markets that are not included in the indices. • fourth, as specified in the management mandate laid down by the ministry of finance, we have established environment - related mandates. and as also specified in the mandate, we take account of differences in fiscal strength between countries in the composition of government bond investments. based on the kind of systematic adjustments indicated above, a tailor - made operational portfolio has been constructed. this reference portfolio serves as a basis for more traditional selections of securities. the fund ’ s largest holdings in terms of ownership share, both in equity and fixed income, are based on our own analyses of investee companies and countries. chart : external managers the large majority of the fund ’ s investment decisions are made within our own organisation. still, we have always used external management companies in areas where developing inhouse capabilities has not been an efficient option. most of the external mandates have in recent years been directed to specialists in specific sectors or countries. the fund is a long - term, responsible investor. the objective of our management is to achieve the highest possible return at acceptable risk levels. norges bank ’ s work on responsible investing underpins this objective. as a long - term investor, we are dependent upon healthy and sustainable developments in investee companies and markets. our work with responsible investment rests on three pillars : we promote international principles and standards, and express our expectations as an investor on certain issues. we exercise active ownership through voting and engagement with companies. and we integrate environmental, social and governance issues into the investment process and risk management. bis central bankers ’ speeches chart : responsible investment i promoting good industry standards is an effective way of safeguarding our investments and assets in the long term. our efforts to promote high standards of corporate governance and sustainable business practices build on principles and guidelines developed by organisations such as the un and the oecd. as a financial investor, the fund is affected by the regulation of financial markets.

mr gjedrem reports on economic perspectives in norway annual address by the governor of the central bank of norway, mr svein gjedrem, at the meeting of the supervisory council of norges bank on 18 / 02 / 99. background twenty - two years ago, in 1977, the norwegian economy witnessed the onset of a deep crisis. an economic recession in industrial countries, high price and wage inflation in norway and the expansion of public welfare services resulted in large current account deficits. thirteen years ago, in 1986, the norwegian economy was also in a difficult situation. a debt - financed upswing in consumption and investment, a fall in oil prices and a reduction in working hours gave rise to major imbalances in the norwegian economy. in 1998 clouds again gathered over the economic horizon. costs rose to a high level in norway compared with other countries, oil prices fell, and the current account balance deteriorated sharply. this signalled a period of sluggish growth following six years of a strong upswing in economic growth and employment. the krone depreciated and interest rates were raised. there are many features that distinguish the three turning points in economic developments. however, one common denominator is the sudden shift in the assessment of future oil revenues. fluctuations in petroleum revenues have proved to be a source of instability in the mainland economy. following the last two turning points, the norwegian economy went through a period of major restructuring, particularly at the end of the 1980s. today the situation in the norwegian economy is different. however, this time there is also reason to ask whether we are sufficiently prepared. is our economy sufficiently robust? the fall in oil prices was triggered by an international financial crisis and slower growth in the world economy. the norwegian economy is highly exposed to international fluctuations. is our own financial system and business sector strong enough to cope with this situation? how should monetary and fiscal policy be formulated in such an exposed and oil - dependent economy? these are the issues i would like to address this evening. a turbulent world even before oil prices started to fall, the warning signals were flashing for everyone to see. the norwegian economy was overheating in an environment of global economic distress. the signals from asia were clear. the problems first appeared in thailand a little more than 18 months ago, but spread quickly to malaysia, the philippines, indonesia and south korea. in most of these countries, a sharp upturn had been stimulated by low interest rates and financed through a considerable accumulation