step backwards. i do of course realise that it is unrealistic to ask for the creation of an international institution with supranational powers to deal with distressed cross - border banks. so, in the absence of a common global regime the best we can do is to try to develop a common international approach to crisis management and resolution. if we cannot do it as one, at least we need to make sure that we can do it similarly and in a coordinated fashion. so we need to embark on an even bolder agenda than the present supervisory reforms. here, we may draw some inspiration from the last century. after the war we created the imf to provide some basic rules for the monetary system, recognising that the system is interlinked and that problems in one country may also create problems in others. in the 1980s we agreed on the basle accord with joint supervisory rules for the internationallyactive banks. recognising now that supervisory convergence hinges on agreement on crisis management and resolution, i think that it is time to address this issue in a serious way. i see this as a necessary step for europe, given our single market. but in a broader context too, it will be a natural step towards strengthening the global financial system. thank you.

goods and services. a strong krone may also result in lower activity in the business sector and gradually translate into lower wage growth. the krone exchange rate shows monthly, quarterly and yearly variations. the long - term value of the krone is determined by changes in the terms of trade and permanent differences between domestic and external inflation and productivity. in recent years, the krone has appreciated. inflation has nevertheless moved up, and is now close to 2. 5 per cent. a stronger krone has been needed to keep down inflation. the real krone exchange rate measures changes in either the price level in norway relative to other countries or the wage level in norway relative to other countries. in common currency, the relative domestic price level is now between 5 and 10 per cent higher than the average for the oil age. the wage level measured in common currency is between 15 and 20 per cent higher than the average since 1970. norwegian wage costs relative to other countries have reached an unprecedented high level. nevertheless, there is full employment in norway. so far, our business sector has been able to live with the high cost level. but, it may be that we have not yet seen the full impact. it is primarily through the government budget – growth in general government spending – that the authorities can influence the krone exchange rate and the scale of internationally exposed business. our projections for economic developments are presented in norges bank ’ s monetary policy report. the report also includes our forecasts for the key policy rate ahead. norges bank ’ s executive board has decided that the key policy rate should be in the interval 5 - 6 per cent in the period to the next publication of the monetary policy report in june, unless the economy is exposed to major shocks. in accordance with this strategy, the key policy rate was raised by 0. 25 percentage point to 5. 50 per cent in april. when inflation is close to 2. 5 per cent, the normal interest rate level over time is considered to be between 5 and 6 per cent. the key policy rate is now in this range after a series of incremental increases over the past three years. the interest rate hikes are curbing growth in economic activity. at the same time, increased premiums and uncertainty in financial markets are increasing the cost of corporate and household borrowing. moreover, the krone is strong. on the whole, monetary policy is probably having a tightening impact. as a result, capacity utilisation may ease ahead so that inflation