. such trust cannot be demanded, it needs to be earned through appropriate actions and behaviour. during the current difficult times that we are experiencing in our country, the building up of trust takes on even greater importance. all of you who have taken the time and made the effort to be here today, both from schools and rhodes university, are the ones who will be entering the labour market in the near future. it is you who will need to grapple with the very complex world of the 21st century. nothing can prepare you for all eventualities, but the fact that you have a sound education will provide you with the knowledge essential to navigate into unknown territory. remember, while certificates are important, it is the knowledge that goes with the certificate that will bring you the life you want to live. there is no substitute for hard work, for seeking knowledge, and using your drive and sense of purpose for the greater good of society and fellow human beings. your future also depends on you. as south africans, let us work together, young and old, across all our historic divides of race and gender, to build a future that belongs to all of us. thank you. bis central bankers ’ speeches references : bernanke, b ( 2007 ). the financial accelerator and the credit channel. speech at the credit channel of monetary policy in the twenty - first century conference, federal reserve bank of atlanta, georgia. eichengreen, b ( 2012 ). europe ’ s trust deficit. project syndicate, march 12. gapper j ( 2012 ). incentives for banks to stray will persist. financial times, september 12. lane, p. ( 2012 ). financial globalisation and the crisis. paper presented at the 11th bis annual conference on “ the future of financial globalisation ”, lucerne. leonhardt, d ( 2008 ). lesson from a crisis : when trust vanishes, worry. the new york times, september 30. reinhart c, and k rogoff ( 2011 ). this time is different : eight centuries of financial follies. pricenton university press. bis central bankers ’ speeches

inflation may stabilise at around 2½ per cent at the three - year horizon. developments in line with these projections imply that the output gap will widen to about 1¼ per cent in 2006 and then gradually narrow. developments since the march inflation report was published do not provide grounds for changing the perception of the main features of developments in the real economy. the results of the wage settlement so far may suggest that wage growth this year will be somewhat lower than projected by norges bank. inflation, on the other hand, has been broadly in line with expectations, and the krone exchange rate has developed approximately as projected since the march inflation report was published. the inflation outlook has not changed significantly since the march inflation report was published. at its monetary policy meeting on 25 may, norges bank ’ s executive board decided to leave the sight deposit rate unchanged at 1. 75 per cent. the executive board stated : “ the monetary policy assessments presented in the inflation report in march indicated that the interest rate will rise after a period and at a gradual pace. the assessments were based on market participants ’ expectations that the interest rate would be increased in the summer. a development where the interest rate rises gradually - in small and not too frequent steps - was considered to provide a good balance between the different objectives. the outlook for inflation and activity has not changed substantially since the march inflation report. as an alternative, the executive board considered increasing the interest rate already at this meeting. nevertheless, the executive board did not find grounds – given the prospect of continued low inflation for a period ahead – to deviate from expectations in the money and foreign exchange markets at present. ” there are a number of uncertainties that may lead to different developments than those indicated by the projections in the inflation report. increased current account imbalances in major countries along with high oil prices and volatile oil markets are contributing to the uncertainty concerning developments in the global economy. household debt one area of uncertainty associated with the economic outlook in norway, stressed by many observers, is the high level of and strong growth in household debt. in the rest of this speech, i will consider possible causes of this strong growth. i will also say something about the possible consequences of debt accumulation for the economic outlook in general and for financial stability in particular. i. causes of household debt growth debt is growing far more rapidly in the household sector than in the enterprise sector. growth in household debt has generally been high during the last five years. the interest rate reductions since december