where the economy was in a state of chaos following the napoleonic wars, and confidence in the monetary system was low. the previous joint currency with denmark had col - lapsed, and attempts to restore it had failed. it took a long time before the newly established norges bank managed to create credibility for the norwegian currency. in the first years of its existence, the bank ’ s main tasks included managing silver tax payments and handling receipts, printing and distributing banknotes and bookkeeping. in january 1817 it was the only bank in the country. it received deposits, but charged a fee for that service. thus, today ’ s situation with depositors having to pay for keeping their money in the bank is not entirely a new phenomenon. in the 1870s norway joined a currency union with denmark and sweden that lasted until the outbreak of the first world war. the scandinavian countries enjoyed strong economic growth during this period. large cross - border capital flows supported the industrialization of the scandinavian countries, and financial integration driven by the gold standard and the currency union was probably a contributing factor to the favourable development. both sweden and nor - way were relatively poor countries situated on the outskirts of europe when norges bank was founded 200 years ago, but with the advent of industrialization in the late bis central bankers ’ speeches 19th century both countries began their journeys to become two of the richest nations in the world. economic and political developments in norway and sweden have also showed similar patterns in the period since the second world war. the role of the central banks was very limited in both sweden and norway. the monetary policy decisions were made by the government and norges bank became more of a technical implementer of government policy. for much of the 1970s and 1980s, economic policy in both norway and sweden lacked a long term strategy and credibility. inflation and wages soared, and lost competitiveness resulted in repeated devaluations. in 1982, after a large devaluation of the swedish krona, it was declared that there would be no more devaluations. the same thing hap - pened in norway in 1986, when the norwegian krone was devalued for the tenth time in a decade. interest - rate setting once again became the genuine responsibility of norges bank. we have also shared similar problems regarding the lending spree that started in the mid - 1980s, and ended in a systematic banking crisis and in the worst re - cession since the 1930s. both countries experienced solid economic growth and very rapid credit

. furthermore, the fund managed by norges bank is now seen as a model showing the way for other sovereign wealth funds. bis central bankers ’ speeches even though monetary policy in norway – and sweden – is geared towards an inflation target, the development of the exchange rate cannot be ignored. it is also worth noting that both the riksbank and norges bank pursue their monetary policy in the shadow of the ecb. both central banks have to take into ac - count the effects on the exchange rate of its monetary policy, since the value of the krona greatly influences import prices and ultimately inflation. this may imply a monetary policy stance that is not optimal in terms of stabilizing the domestic economy and its financial system. in fact this is one of the main issues in economic policy in sweden and norway these days. central banking is not limited to finding and optimal strategy for monetary pol - icy. what central banks can and need to do is shaped by the developments in the whole world economy, and largely influenced by political circumstances, in - side and outside our own countries. both formal cooperation and informal ex - changes of ideas is now intense between central banks in many countries, and in particular between norges bank and the riksbank, who continue to face very similar challenges. so to round off : norway and sweden have followed one another through the centuries, in war and peace, through crises and growth. and we can be thankful that we have succeeded in moving from poverty to wealth and becoming two of the world ’ s wealthiest nations. often the central banks have been able to contribute to higher welfare, but sometimes monetary policy has unfortunately been destabilizing. our joint history is continuing, we have common challenges to face going for - ward. higher capital and labour mobility throughout the world opens new possibilities to raise welfare even further, but globalisation also require that we try to find common strategies across countries. we can also enjoy our similarities and continue teasing one another when we meet on the sports field. as sweden now follows its team in euro 2016, we can ’ t help but ask, oh where ’ s norway? but on the other hand we can expect a lot of teasing from you in the next world cup ski event! bis central bankers ’ speeches