common. let us now look at how households save. households save either in the form of fixed investment, mainly their own homes, or in the form of financial investments. this chart shows how households distribute their total wealth. the value of housing wealth is very uncertain. by our estimates, households ’ total housing wealth was around nok 2000 billion at the end of 2004. housing wealth accounted for a little more than half of total gross household wealth at this time. the picture was about the same in the mid - 1990s. if we look more closely at household financial wealth, we find that it is spread over various assets, with insurance claims the most important at the end of 2004. by paying premiums into various insurance schemes, mainly life and pension insurance, households earn the right to future disbursements from the insurance companies. these premiums accounted for more than a third of household financial wealth at the end of 2004. the investment instruments perhaps most commonly referred to, securities and bank deposits, accounted for less than a quarter of total wealth. household gross financial wealth must be seen in the context of the debt accumulated by households as a group. even when this is taken into account, the household sector as a whole has positive net financial wealth. as a share of disposable income, household net financial wealth increased from the end of the 1980s to the mid - 1990s. in relation to disposable income, debt was reduced, while household wealth increased. from the end of the 1990s, household debt and wealth have risen in tandem. net wealth has remained fairly stable at around 50 per cent of disposable income. the rise in household debt must be seen in the context of the strong rise in house prices. from oil to financial wealth household saving is part of the country ’ s total saving. as a nation, we can save by investing in fixed assets in norway or by making financial investments abroad. domestic fixed 2 / 7 investment provides a return in the form of higher production capacity in the future. building up financial assets abroad allows us to pay for more imports in the years ahead. in the past few years, there has been a sharp increase in norway ’ s saving, as conventionally measured in the national accounts. as a share of gdp, norway ’ s saving after the turn of this century has been almost double the average for the 1980s and 1990s. the explanation for these figures lies in the government petroleum fund. norway ’ s petroleum resources are in principle part of our

between the objective of stabilising inflation at target and the objective of stabilising growth in output and employment. it was the executive board ’ s assessment that the sight deposit rate should lie in the interval 1¾ 2¾ per cent in the period to the publication of the next inflation report on 2 november. following the monetary policy meeting on 21 september, the executive board stated that developments in output, demand and underlying inflation had been consistent with the projections in the june inflation report. the executive board also stated that its monetary policy strategy and assessments indicate that the interest rate should be gradually increased ahead. one option was to increase the interest rate at this meeting, but the executive board found it appropriate to leave the interest rate unchanged. conclusion in my speech today, i have focused on how much and in what way households save and on the prospects for wealth creation. i have also pointed to the challenge facing our current pension system as an ever increasing share of the population gradually reaches retirement age. increased saving today may be a way to address this challenge, but this is not enough in itself. in the long term, the most important factor will be how we manage our national wealth. even though norway ’ s petroleum wealth is substantial, it is our human resources that account for most of our national wealth. even a small increase in the “ return ” on human capital might generate considerable gains. the return on this capital partly depends on our pension schemes and the application of social security rules. these should be designed in such a way that they provide incentives and opportunities to work. labour market legislation must also promote production and employment. in may, the storting ( norwegian parliament ) deliberated the pension commission ’ s proposals for reforming the national insurance system. there was agreement on some of the main points, but the specific content has yet to be determined. if we succeed in reducing the 6 / 7 growth in pension expenditure by modernising the national insurance system and introducing other reforms, this will be an important step towards addressing the fiscal challenges facing us. 7 / 7