with other large public investment funds. an example is the singapore government investment corporation ( gic ), where the country ’ s finance ministry also formulates a mandate with a benchmark portfolio and investment limits, but the board of the gic has greater responsibility for actual asset allocation than norges bank ’ s executive board. another example is the canada pension plan investment board. the governance structure of this fund differs even more from our own in that the board itself draws up the investment strategy pursuant to a statutory objective. chart : asset allocation in the gpfg, gic and cppib. at the same time, there are considerable differences between the asset allocation in the gpfg and that in the canadian and singaporean funds. this probably reflects the differences in governance structure as governance structure and organisation set a framework for the investment strategy to be pursued. in the consultation response to the central bank law commission ’ s recommendations, we place emphasis on the relationship between governance, organisation and strategy. i shall return to this shortly. first, however, remember that in addition to defining the investment strategy, the mandate from the ministry of finance contains specific reporting requirements. thanks to its extensive reporting, the gpfg enjoys a reputation of being one of the world ’ s most transparent sovereign wealth funds. for a fund with the entire population as actual owners, transparency is vital for ensuring democratic control and confidence in investment management. both the fund ’ s investment strategy and investment management have tolerated substantial return volatility over the past 20 years, partly owing to transparency about the consequences of strategic choices and performance. regardless of how the gpfg is organised in the future, it is essential to maintain the established confidence in and legitimacy of the fund. transparency about investment management will continue to be important in this regard. the investment strategy and organisation have evolved in parallel the investment strategy for the fund has evolved gradually since the beginning in 1996, with decisive changes along the way. the initial capital in the fund was invested exclusively in government bonds. already in 1997, it became clear that the fund would grow larger than assumed and the saving horizon longer. it was therefore decided that 40 percent should be invested in equities to attain a higher long - term real return. from 1998, the fund therefore went from being a lender to just a handful of countries to becoming part owner of a wide range of private companies. chart : evolution of strategy and governance structure over time from 2002, fixed income investments were expanded to include bonds issued

, and has doubled since the trough in december 2008. metals prices have also risen. the increase in oil prices reflects low growth in oil production, more positive expectations as to the world economy and a weaker us dollar. on the other hand, oecd oil inventories are still ample and opec spare production capacity is higher than in the preceding years, while oil demand remains weak. key rates are close to zero in many countries. several central banks have signalled that key rates will be kept low for a long period, and key rate expectations abroad have fallen. pricing in the market indicates an expected rise in key rates in a number of countries after the turn of the year. the krone depreciated considerably in the second half of 2008, but has since appreciated again. stronger risk appetite and market expectations of a somewhat earlier rise in interest rates in norway have probably contributed to the krone appreciation. lower capital outflows from the government pension fund – global have probably also made a contribution. trading in nok has picked up since summer and foreign exchange market liquidity has improved. the projections are based on the assumption that the krone will depreciate somewhat from the current level. it is for example assumed that the real krone exchange rate will gradually revert to its historical average. the krone is floating and fluctuates somewhat. it has shown a tendency to appreciate in favourable times and fall in value in response to negative shocks in the norwegian economy. nonetheless, budgetary policy and the petroleum fund mechanism contribute to stability in the krone, as is clearly reflected in the movements in the krone in recent years compared with the currencies of other open economies with substantial exports of raw materials, such as australia and new zealand. the outlook for the norwegian economy is better than for most other advanced economies. the rebound in activity will probably occur more rapidly, with inflation maintaining a somewhat higher level than in many other countries. monetary policy measures, combined with petroleum investment and growth in public spending, have boosted activity. the downturn in the norwegian economy may be relatively mild. the norwegian authorities implemented a range of measures to mitigate the impact of the crisis on the norwegian economy. as a result, the liquidity crisis did not turn into a bank solvency crisis or a crisis in the real economy. norges bank reduced the key policy rate considerably last autumn. the key policy rate has been reduced further in 2009 to 1. 25 per cent. norges bank