population have an impact on government budgets. the actual building up of the fund may span a short generation. a fund with investment abroad enables norway to separate the revenues generated by oil and gas production from petroleum revenue spending. an alternative could have been to regulate the production rate, keeping our wealth under the sea bed for a longer period, as was attempted in the 1970s when the production ceiling was set at 90 million standard cubic metres per year. oil companies currently produce 240 million standard cubic metres per year. the fund acts as a buffer between widely fluctuating oil revenues and domestic expenditure. the annual spending decision can be made independently of the size of the revenues. thus, the fluctuations in government oil revenues do not have an automatic impact on the norwegian economy. the fund also has a stabilising effect on the krone exchange rate as capital outflows increase when norway ’ s petroleum revenues rise. as a savings plan, the fund enables petroleum revenues to be used by not only the current generation but also future generations. the fiscal rule ensures that this is the case. international capital markets play an important role for norway. we drew on borrowing opportunities abroad when the petroleum industry was under development. we did the same in order to expand welfare schemes and to finance the countercyclical policy of the mid - 1970s and the early 1990s. in the past 15 years, international financial markets have enabled us to convert national oil and gas resources into foreign equities and bonds. see chart “ real return on the fund ” at the end of the speech. since its establishment in 1998, the fund ’ s average annual real return after costs has been 2. 9 per cent, or somewhat lower than the expected long - term return. this figure is marked by the challenging character of the financial crisis. the fund lost nok 633 billion 4 in 2008, but a market reversal in 2009 has resulted in a positive return of nok 716 billion over the past five quarters. so far, the fund seems to have fared relatively well through the most severe financial crisis for many decades. we still consider a real return of 4 per cent as realistic over time. this is based on the assumption that investment in sound government securities in the market can provide a reliable real return of about 2½ per cent. at the same time, the fund can reap a return of 2 to 2½ per cent in the long term from the three - fifths equity portion, some gains on corporate bonds and returns from active management

the speed of technological change and a growing reliance on third - party, technology - based services is increasingly introducing new risks and vulnerabilities to the sector. to begin to address this, the fsb is focused on achieving greater convergence in areas such as regulatory reporting of cyber incidents, and we will deliver those recommendations to the g20 in october. banking reforms — an assessment to date next month, the fsb will release the final report of its most ambitious evaluation of the effects of post - gfc banking reforms. the report on too - big - to - fail ( tbtf ) reforms is the fsb ’ s most analytically rigorous evaluation carried out to date. when looking at these reforms, indicators of systemic risk and moral hazard moved in the right direction, and effective tbtf reforms seem to have brought net benefits. in fact, at the beginning of the covid event, we observed a far more resilient banking sector than that which entered the 2008 crisis. yet, if the benefits of tbtf reforms are to be fully realized, there remains further work to do. the fsb outlines this work in its forthcoming evaluation. further analysis of such reforms, international financial standards, agreed g20 and fsb commitments, recommendations, and other initiatives will provide us with better insights into whether the reforms are working as intended or conflict with one another, are structured efficiently, and if they are in need of refinement. transitioning away from london interbank offered rate ( libor ) - 10 one last particular item to mention : libor. transitioning away from libor is a significant undertaking that the fsb has been engaged in for almost a decade. the fsb set forth a roadmap for clear actions that financial firms and their clients can take to ensure a smooth transition away from libor. 3 this year, the fsb will report to the g20 on ongoing progress and issues related to the libor transition, including supervisory issues related to the benchmark transition. conclusion we faced a confluence of events over the past year that demanded international coordination in several key areas, and that is precisely why the fsb was created more than ten years ago ; a beacon at the end of another fateful march. the span of territory and topics covered can admittedly seem bewildering at times — i ’ ve covered only a few of them today. yet as the fsb builds its agenda for each coming year, the process is much like a pointillist painting.