2. 5 percent. an expected real appreciation could then occur partly in the form of wider price and cost differentials between norway and its trading partners. the period of rising oil revenue spending now appears largely to be over. thus, it is difficult to find compelling arguments for setting an inflation target in norway today that differs from that of our trading partners. the new regulation is consistent with how monetary policy has been conducted in practice in recent years. the regulation states that : “ inflation targeting shall be forward - looking and flexible so that it can contribute to high and stable output and employment and to counteract the build - up of financial imbalances. ” as long as there is confidence that inflation will remain low and stable, monetary policy can contribute to stabilising the economy. when the economy is exposed to shocks, the central bank can respond rapidly by adjusting the key policy rate, as we did in 2008 and when oil prices fell in 2014. a flexible inflation targeting regime can reduce the risk of unemployment becoming entrenched at a high level following economic contractions. nevertheless, monetary policy cannot assume primary responsibility for high output and employment. the level of output and employment over time depends on overall economic policy, including the tax and social security system, the wage formation process and the functioning of the labour market. monetary policy is only one component of such an overall framework. 2 / 4 bis central bankers'speeches the importance of financial markets and financial stability was underestimated before the crisis – also by central banks. the financial crisis revealed how harmful financial imbalances can be. monetary policy can in given situations take account of the risk of a build - up of financial imbalances. but monetary policy cannot take primary responsibility for heading off a gathering storm. regulation and supervision of financial institutions are the primary means of addressing shocks to the financial system. the build - up of financial imbalances has in recent years been given little weight in monetary policy among the major central banks. their focus has been on counteracting a deeper and more prolonged downturn and on preventing deflation. in countries that were less affected by the financial crisis, more attention has been devoted to financial stability considerations. in high - tech, global financial markets, capital moves rapidly between different currencies. a wide interest rate differential could have a substantial impact on the exchange rate, with repercussions on inflation, output and employment. this is why low interest rates in large economies that were severely hit by the financial crisis quickly

##ed. future structure of real - time payments norway was an early adopter of digitalisation and its payments infrastructure has been worldclass. we have reaped the benefits for many years. but then the development of common infrastructure came to a halt. a number of neighbouring countries have built payment infrastructures that in some areas are now ahead of ours. common infrastructure makes sense. it enables us to realise economies of scale, a wellfunctioning payment network and a level playing field. payment service providers will be able to compete for customers supported by an efficient and secure system. banks save considerable sums because an extensive network of branches is no longer necessary. the infrastructure is a collective good that benefits everyone. 1 / 5 bis central bankers'speeches it has long been our experience that industry operators come together and agree good solutions in partnership with norges bank. but developments in technology and market structure, where payment services are increasingly becoming a competitive arena, may hinder the emergence of good common solutions. we run the risk that progress will slow and the payment system will become fragmented because the common infrastructure is eroding. we must now consider whether norges bank should take action to counter this fragmentation. future users of payment services will hardly be satisfied with payment transactions that take several hours or days to complete. the infrastructure for real - time payments is therefore critical. in 2016, norges bank took the initiative on a joint project with the banking industry to put in place an improved real - time payment platform. in spring, norwegian banks declined the invitation to participate in the p27 project. the soon - to - be - launched straks 2. 0 instant payment platform is an improvement, but not a permanent solution for real - time payments in norway. among other things, it is not sufficiently well - suited to business users. the question is how we proceed from here. it has proved to be a challenge to drum up support for carrying out the necessary modernisation of the infrastructure owned by industry bodies. norges bank has launched a project to assess the payment and settlement system as a whole. the aim is to ensure that we have an efficient and secure payment infrastructure also in the future. some key issues are : should our payment infrastructure continue to be all - norwegian or could it be more international? in that case, how do we resolve the questions relating to national contingency preparedness? should payments continue to be cleared between banks prior to settlement at the central bank, or is it more efficient to settle