banks, as monetary institutions. but as i noted earlier, non - banks – including money funds and finance companies – turned to central banks for liquidity during the 2007 – 08 crisis. the prevalence of non - bank banks as they used to be called, or shadow banks as they are now known, was a deep faultline in the international financial system. things cannot be left where they are. the status quo was deeply unsatisfactory, and if we do nothing it will be made worse by the re - regulation of the banking system, which creates powerful incentives to reinvent the economic substance of banking beyond the perimeter of prudential regulation and supervision. the authorities internationally, led by the fsb and with the active involvement of adair turner and myself, are debating how to tackle the phenomenon of “ shadow banking ”. a preliminary, but i hope substantive report will go to g20 ministers and governors in october. and in the uk, we will be helped by the fpc ’ s responsibility to advise the government on when the perimeter of regulation needs to be altered. deposit insurance and resolution the reforms of deposit insurance are hardly less important. in the uk, there is a push towards the deposit insurer, the financial services compensation scheme, being able to pay out within 7 days. the bank attaches very high priority to this indeed. there is still work to be done. it will entail costs for banks. the weaker standard of 20 days being contemplated by the eu is a serious mistake. that will eventually become apparent when, somewhere in the eu, depositors in a failed bank protest that they are suffering severe hardship from being cut off from their current account for weeks. those are circumstances in which there would be calls for the state to step in to prevent the closure of ailing banks. this highlights the biggest hole in the old social contract – the absence of a regime for resolving distressed banks in a way that avoids both taxpayer support and systemic disorder. how to go about doing this was the principal subject of my speech here two years ago. much has happened since. next month, the g20 financial stability board will publish a consultative document on the resolution of systemically important financial institutions ( sifis ). it will cover resolution instruments ; cross - border co - operation ; and steps needed to reduce obstacles to resolution inherent in the organisation and practices of firms themselves. i will confine myself today to just a few words on the third of those planks. however good the bis

to alleviate the situation. central banks have cut policy rates and taken extensive measures to stabilise financial markets. the sharp global downturn amplifies the challenges for a small open economy like norway. chart : marked fall in oil prices 1 / 4 bis central bankers'speeches on top of this, there has been a substantial fall in oil prices as a result of a sharp fall in global oil consumption. despite production cuts, total oil production is substantially higher than consumption, with little spare storage capacity. against this background, oil prices are likely to remain low in the coming period. futures prices indicate that oil prices will pick up, but to a markedly lower level than the level we have been used to seeing in recent years. there were already prospects at the beginning of the year that petroleum investment would decline. owing to the fall in oil prices, oil companies have cut their investment plans. low oil prices affect the outlook for the norwegian economy. chart : substantial krone depreciation the fall in oil prices and general uncertainty in the wake of the coronavirus outbreak have weakened the krone exchange rate. on 19 march, the krone hit record - weak levels against a number of currencies. at that time, uncertainty in the nok market was particularly high, and limited liquidity contributed to amplifying nok movements. against this background, norges bank announced that there could be a need to intervene in the nok market. in order to support a wellfunctioning nok market, norges bank has made extraordinary nok purchases totalling nok 3. 5 billion in the foreign exchange market. chart : money market turbulence financial market volatility also led to high credit premiums. as a result, the spread between the policy rate and the norwegian money market rate, nibor, widened markedly in march. nibor is an important reference rate and has a significant impact on the rates offered by banks. as shown in the chart, nibor has recently fallen and the spread of nibor over the policy rate is now close to a normal level, reflecting the large - scale measures taken by central banks, including norges bank, to supply liquidity to the market. norges bank has provided extraordinary f - loans for banks in several rounds, in nok and usd. an important aim of these measures is to ensure that changes in the policy rate pass through to banks ’ lending rates and to market rates. chart : policy rate reduced to zero according to the regulation on