market earlier than otherwise. the housing market may now be in a state of euphoria. the rise in house prices has been accompanied by a sharp increase in household debt. in norway, household debt is now almost twice the level of disposable income, and the debt to income ratio is the highest ever. it is higher than in sweden and the uk, but lower than in denmark and the netherlands. norway is among the countries with the highest share of owner - occupied dwellings, at around 80 per cent. this high proportion partly accounts for the high mortgage debt of households. in recent years, new loan products have also been launched, facilitating mortgage equity withdrawal. housing wealth has become more liquid. borrowers have greater scope for choosing repayment profiles. we cannot identify the exact level of household debt that can be sustained over time, but the rapid build - up of debt makes households more vulnerable. housing investment for the household sector as a whole is now being fully debt - financed, which means an increase in net debt. it would appear that household saving has fallen markedly in norway in the recent past. saving was negative in the latter half of 2006, which is the first time saving has fallen since 1988. the pronounced fall in saving indicates that households are taking greater chances. at the same time, government revenues and savings are high. the long period of prosperity and government budget surpluses may have engendered a sense of security which is also affecting household saving and house purchases. petroleum and the government pension fund – global high oil and gas production and high prices, combined with high returns, have resulted in a rapid rise in the value of the government pension fund in recent years. the norwegian authorities have been successful in ensuring that the bulk of the petroleum wealth benefits norwegian society as a whole. both the state ’ s ownership interests through the state ’ s direct financial interest in petroleum activities ( sdfi ) and the tax system have been important. the companies that extract oil earn a reasonable return on their investments and have incentives to invest, but the economic rent has essentially accrued to the general public. the authorities have so far also been successful in smoothing spending of petroleum revenues over time. this is important for several reasons. first, it is misleading to look upon the cash flow from petroleum activities as income. the appropriate economic perspective is to see the transfer of cash flow to foreign investments as a way of transferring capital from one account to another – from petroleum to foreign securities. by doing so, we divers

rasheed mohammed al maraj : global financial architecture – challenges for islamic finance keynote address by his excellency rasheed mohammed al maraj, governor of the central bank of bahrain, at the 7th islamic financial services board summit 2010, manama, 4 may 2010. * * * your excellencies, ladies and gentlemen : it is a great honour for the central bank of bahrain to be invited to host the 7th islamic financial services board summit. on behalf the central bank i should like warmly to welcome you to the kingdom of bahrain. to those of you who are returning to bahrain, it is a great pleasure to have you with us again. to those of you who are visiting bahrain for the first time, we hope your visit will be a pleasant one and that it will be the first of many. i would like to congratulate the organisers for their efforts in putting together such a strong programme and for ensuring that we will hear from some extremely distinguished and knowledgeable speakers over the course of the next two days. i would also like to express my appreciation to the sponsors without whose support this summit would not be possible. as one of the founding members of the ifsb the central bank of bahrain has been a strong supporter of its work, as both a standard setting organisation and as an organisation that promotes greater awareness of islamic finance. it has been particularly pleasing to see the ifsb go from strength to strength and for its membership to expand to now include regulatory and supervisory authorities, international financial institutions, as well as market players and professional firms operating in almost 40 jurisdictions. great credit must go to professor rifaat for his role as secretary - general in ensuring the ifsb ’ s continued development. this will be professor rifaat ’ s final year in office and i am sure you will all join me in acknowledging his enormous contribution to the development of islamic finance and the strong legacy he leaves at the ifsb. under his leadership it has become established as the leading forum for the islamic financial industry. the theme of the 7th annual summit is “ global financial architecture : challenges for islamic finance ”. this theme is particularly timely. as the dust settles after the financial crisis it has become increasingly clear that there will be no return to business as usual for the financial industry. in the advanced economies there is a determination to make sure that there is no risk of a repeat of the crisis and an acceptance that in practice this means financial institutions will be smaller and less profitable than in the past. governments