worth individuals. for the resource - poor largely excluded population, financial literacy would invariably involve addressing deep entrenched behavioral and psychological factors that are major barriers to participating in the financial system. for the purpose, our financial literacy efforts are primarily directed towards dissemination of simple messages of financial prudence, in vernacular languages, through large awareness campaigns across the country combined with vigorous roll out of financial inclusion plans by banks, insurance and pension funds, and others. however as briefly mentioned earlier, it is important to note that being literate is not a necessary prerequisite for attaining financial literacy as the basic financial messages can be bis central bankers ’ speeches conveyed through various alternate means without relying on written inputs. some of the basic messages we seek to deliver through our financial literacy drives are : why save why save regularly and consistently why save with banks why borrow within limits why borrow from banks why borrow for income generating purposes why repay loans why repay loans in time why do you need insurance why you will need regular stream of income post working life – pension why you should keep money aside regularly and consistently during your earning life for pension in old age what is interest? how moneylenders charge very high interest rates? for the middle and lower - middle income groups that are participating in financial markets as either savers or borrowers or both, i. e. the financially included, financial literacy efforts should aim at enhancing their knowledge about the market and new products / services. for instance, there is a large section of our population that has a bank account but refrains from participating in the capital market on account of lack of knowledge. financial literacy, in such cases, would focus on creating awareness about the way the capital market functions and also about the fact that the equity market may at times provide relatively higher returns coupled with higher risks as compared to other investments. for the high net worth individuals, better knowledge of the financial markets, new and innovative products and instruments is important as it helps them in making better use of the available avenues in the financial markets. this knowledge is also useful for taking more informed decision in their quest for greater returns from their investments in the market and to avail credit at relatively cheaper rates. whether saving or investing, the basic lesson that “ higher return implies higher risks ” should not be lost sight of. sometimes we have a tendency to feel that high net worth individuals or resource rich corporate or bankers do not need financial education. nothing could be farther from truth. to quote an example, many corporates have incurred losses

some variables have been used. both the federal reserve and the bank of england have for instance been linking future policy actions to specific unemployment thresholds. publishing the central bank ’ s own interest rate forecast as a regular part of monetary policy communication is a third type of forward guidance. the reserve bank of new zealand was the first central bank to pursue this approach in 1997, followed by norges bank in 2005. 5 this type of forward guidance is also conditional, and it is typically accompanied by a consistent forecast for output and inflation. as the interest rate forecasts are revised, market participants learn over time how the central bank normally responds to different types of shocks. when the central bank explains how it plans to achieve its target, it may also improve confidence and credibility. forward guidance in norway before i present our version of forward guidance, let me give you a brief background on the norwegian economy and our monetary policy framework. [ chart : the norwegian economy ] norway is a small, open, natural resource - rich economy. about a quarter of our gdp is related to oil and natural gas extraction. a large part of the petroleum production is exported and the bulk of the revenues saved in a sovereign wealth fund. 6 a strong fiscal position, along with a well anchored inflation targeting regime, allowed us to use both fiscal and monetary policy actively during the recent international financial crisis. the unemployment rate has stayed around and below four percent during recent years, and the inflation rate has been low and stable. this picture seems rosy, but there are concerns : property prices have risen sharply over the last 20 years and households are heavily indebted. norges bank was given a formal inflation target for its monetary policy in march 2001. the operational target of monetary policy is annual consumer price inflation of close to 2. 5 percent over time. monetary policy shall also contribute to stabilising output and employment. in this respect, the inflation targeting regime is flexible. norges bank ’ s executive board comprises seven members, including the governor, deputy governor and five external members. the board decides collectively on the key policy rate, normally six times a year. 7 our monetary policy report with financial stability assessment is published on a quarterly basis. analyses and discussions on interest rate decisions are reflected in the report. together with press conferences after our monetary policy meetings, the report is the main channel for our communication of monetary policy. since 2013, the report also includes an evaluation of financial stability conditions, which is also used as a background for norges bank