the model, the relationship between some of the variables is predetermined in line with economic theory. for example, assumptions can be made concerning the sequence in which the different variables will affect one another. a common approach to analysing the effect of the interest rate in models where it is endogenously determined is to apply an exogenous impulse or a shock to the interest rate. this means that the interest rate is raised in response to factors other than those that can be explained historically by the other variables in the model. the effect of such a rise in the interest rate will depend on the variables included in the model, the model ’ s structure and estimation period. on the one hand, the result can be more robust if we use a long time - series in the estimation. on the other hand, historical changes in monetary policy regimes can influence the results. it may therefore be of greater interest to confine the estimation period to, for instance, the period of inflation targeting – the past ten years. consumer price inflation adjusted for tax changes and excluding energy products ( cpi - ate ) bis central bankers ’ speeches the chart shows the effect of an interest rate increase on output and inflation over time in 11 var models. these models only differ in that they are estimated on data from slightly different time periods. in each estimation we use data up to the present, but start the estimation at different points in time between 1986 and 1996. in the analysis, the interest rate is raised by 1 percentage point, that is, an interest rate shock is applied. thereafter the model takes over and the interest rate gradually falls back, in line with the model ’ s estimated reaction pattern. in the course of a couple of years, the interest rate has returned to its starting point. 9 as the chart shows, the degree of spread in the results is considerable. if we were to draw a fan chart, or confidence intervals, around each model, it would become clear that the uncertainty is even greater than the spread alone indicates. the results must therefore be interpreted with caution. if we were nevertheless to draw a conclusion on this basis, it must be that an interest rate increase will dampen gdp growth in the course of the subsequent year – all else being equal. somewhat further ahead, inflation will also recede. as the interest rate returns to normal, gdp growth and inflation will pick up again. our macroeconomic model nemo has a more precise theoretical construction than the var models. nemo is a dynamic

jon nicolaisen : how important is it for a nation to have a payment system? speech by mr jon nicolaisen, deputy governor of norges bank ( central bank of norway ), at finance norway's payments conference, oslo, 14 november 2019. * * * please note that the text below may differ slightly from the actual presentation. the payment system and norges bank a nation needs to have a well - functioning payment system. without fast, inexpensive and secure payments, a modern society grinds to a halt. users today have access to payment methods that are dependent on large - scale it systems to process payments efficiently. we need to ensure that the payment system can adapt to new technologies and meet the needs of business and consumers in the future. the storting ( norwegian parliament ) has assigned norges bank the task of promoting an efficient and secure payment system. this is clearly spelled out in the new central bank act, which enters into force at the turn of the year. norges bank is the operator of the payment settlement system and supervises interbank payment systems. these operational roles may take on greater importance in the coming years. let me point out two trends. first, we note increasing vertical integration in the payment market. customer interface services are becoming more tightly linked to the underlying infrastructure. we saw an example here in norway when vipps merged with bankid and bankaxept. there is also a tendency for common contractual arrangements that were previously situated with industry organisations to be relocated to product companies. another example is apple, which is restricting which payment services can be offered on its mobile devices. in addition, plans are constantly being launched for new kinds of money and payment systems that offer both customer services and settlement, most recently libra, a venture backed by facebook and other investors. as an authority responsible for promoting an efficient payment system, norges bank needs to consider the whole payments chain. we also need to ask ourselves whether it is enough to be a promoter and regulator or whether we need to take on greater operational responsibility in order to perform our social mission. second, changes are taking place in the ownership of critical parts of the payment system. a relevant example is mastercard ’ s planned acquisition of one of the key parts of nets. the nordic p27 initiative is hardly the last push for more international ownership of infrastructure for payments in norwegian kroner. at norges bank, we need to assess the best way for us to ensure that society ’ s interests are being safeguard