øystein olsen : economic perspectives annual address by mr øystein olsen, governor of the norges bank ( central bank of norway ), to the supervisory council of norges bank and invited guests, oslo, 14 february 2014. * * * accompanying charts can be found at the end of the speech. introduction this year is the bicentenary of the signing of the constitution of norway. two hundred years ago, norway was a poor country on the periphery of a europe that was then the world ’ s economic centre of gravity. thomas robert malthus, one of the foremost experts of his time in the field of demography, toured norway in 1799. in his travel diary, malthus describes an agricultural society where most people lived a simple life subsisting on a diet of whatever they were able to harvest. wealthy norwegians, on the other hand, complained about how expensive it was to maintain a respectable lifestyle when everything had to be imported. 1 the napoleonic wars brought harsh economic realities. blockades, epidemics and crop failures took their toll on the population. large parts of southern norway experienced severe famine in 1809 and again in 1813. population numbers fell. the timber trade and shipping industry showed a marked contraction. chart 1 : inflation in norway king fredrik vi financed public expenditure by printing money. combined with goods shortages, the result was hyperinflation and failing confidence in the monetary system. the level of prices rose more than twentyfold in the period from 1806 to 18132, and in 1813 the currency was devalued by almost 90 percent. the first national assembly at eidsvoll was attended by representatives of a nation in deprivation. for the 112 sworn representatives, popularly known as the men of eidsvoll, who took their places as the constituent assembly in spring 1814, the atmosphere was nonetheless full of hope for freedom and a better future. several of them had spent time abroad and had been influenced by the enlightenment philosophers and by the american and french revolutions. the norwegian constitution was inspired by the thoughts and ideas they brought home with them. absolute monarchy under the danish king was to be replaced by the sovereignty of the people and the separation of powers. institutions with clearly distinguished roles would prevent the arbitrary use of power and foster confidence. this evening we are gathered in one such institution. in the discussion at eidsvoll, christian magnus falsen, a key member of the constituent assembly, said that no state can exist without a well functioning monetary system. another prominent

svein gjedrem : developments in the nordic financial industry a central banker ’ s perspective address by mr svein gjedrem, governor of the norges bank, at the nordic financial services conference, held in stockholm, on 18 september 2000. * 1. * * introduction what is the future of the nordic financial services industry? who are the winners in the consolidation process? what is the potential of e - business and the internet? this is just a sample of the important and challenging questions that will be discussed at this conference. fortunately, it is the task of my fellow speakers - and not mine - to try to answer them. given their background as significant market participants, i am sure that they will provide us with some valuable insights. today, most central banks follow structural developments in the financial sector from the sidelines. this has not always been the case. the post - war period was characterised by heavy regulation. the domestic authorities controlled market prices, financial flows and the structure of the financial sector. there was little foreign influence. gradually, markets were deregulated and became more internationally integrated. the central banks ’ main instrument is now the setting of interest rates. the main objectives of central banks have stayed the same : monetary and financial stability. although deregulation is now completed in the industrialised countries, its full impact on the financial structure remains to be seen. in addition, technological developments, internationalisation and increased focus on shareholder value are creating pressures for structural change. together, these forces are reducing the cost of providing traditional financial services and are paving the way for new ways to channel savings and manage risks. structural developments in the financial sector can be important for monetary and financial stability. central bankers thus follow developments with great interest. today i will examine some aspects of the changes taking place and their potential consequences for monetary and financial stability. let me run through the structure of my speech. first, i ’ d like to touch upon some characteristics of the nordic economies as a background to the financial sector issues i will discuss later. second, i will define the two stability terms that i have just introduced. third, i will discuss the growing importance of securities markets. i will then reflect upon cross - border integration in the banking sector and consequences of the internet. finally, i will take a quick look at what challenges structural changes may pose to the authorities, and then conclude. 2. some characteristics of the nordic economies the economies of the four largest nordic countries have some well - known