provide loans against such collateral. of course, the laws and the courts should also protect the depositors and borrowers from any abuse from the banks such as unfair contract terms. in countries where the accounting and auditing rules are weak, or where the accounting and auditing firms are inadequate, various financial problems may occur. banks will not be able to rely on the financial statements when assessing their borrowers ’ creditworthiness. nor can the depositors and other creditors to banks rely on the banks ’ own financial statements. the public authorities must compensate for these weaknesses by implementing additional rules. for instance, the supervisors may need to require stricter rules for provisioning against loan losses, or to set a higher minimum level for bank capital. an important function of the banking system is to facilitate payments between various agents in society. this is based on the fact that bank accounts provide the basis for all payments except cash payments. most payments are executed through the payments system infrastructure, such as the systems for large value payments, cheque clearing, securities settlement systems, stock markets, other exchanges and so on. these systems must be efficient and they must also be secure. if not, there is a risk that problems in one part of the financial system will spread to other parts, including to the banks. many countries have neglected the need for an adequate financial safety net. the safety net includes limited but explicit depositor protection which has to be supported by the necessary legislation, institutions and procedures to conduct an orderly management, resolution or winding - up of problem banks. when bank weaknesses are identified in a country lacking a proper safety net, various problems may occur. the authorities will be reluctant to take adequate and timely remedial action since there are no clear guidelines and since they are afraid of the consequences from non - protected depositors and from other counterparts to the banks. the authorities may instead extend excessive financial support to the problem bank through the central bank for instance in the form of exceptional liquidity assistance which is sometimes abused to cover solvency problems, or through the fiscal budget. occasionally, even failing banks ’ owners have received public financial support to continue the operations of the defunct bank. the overwhelming evidence from experiences in different countries and situations is that letting problem banks continue to operate without taking adequate action simply means that the problems will increase over time and they may in the end result in a systemic and very expensive crisis. to sum up on the preconditions, these must be taken seriously into account when you modernise

that growth will be at least as strong six months ahead as it is now. the figures show that capacity utilisation in the business sector is gradually increasing. some petroleum - related activities and parts of the construction sector are experiencing capacity problems, but so far, the pressure on factors of production does not seem to be particularly high in other industries. all industries report plans for moderate to solid growth in investment. in tandem with the economic upturn, employment is also rising throughout the private sector, with in general little evidence of wage pressures. developments in hedmark and oppland counties are largely consistent with the overall picture for norway. the industry structure in hedmark and oppland does not differ substantially in most sectors from the country as a whole. the exception is the primary industries, which play a far more important role in these two counties than in the rest of the country. the largest farming areas in norway are to be found in hedmark and oppland, and employment is high in the primary industries. the share employed in the public sector is also somewhat higher than in norway as a whole. unemployment has also been markedly lower in the inland region than in most other regions in recent years. according to the most recent reports, the economic situation in the region is favourable. participating companies report rising employment and solid growth in all industries. in retail trade and in the construction sector, activity is brisk and increasing, with a somewhat wait - and - see approach to future developments. growth in manufacturing has slowed slightly, but is likely to stabilise. investment is rising in all sectors. enterprises in the region envisage a slight rise in prices in the period ahead. inflation has edged up since the beginning of 2004. in october, the year - on - year rise in consumer prices adjusted for tax changes and excluding energy products ( cpi - ate ) was 1. 2 per cent. adjusted for the estimated direct effect of the interest rate fall on house rents, the rise in prices is estimated at 1. 3 per cent in october. total consumer prices ( cpi ) rose by 1. 8 per cent in the same period. prices for domestically produced goods and services rose by 2. 0 per cent in the twelve months to october this year. the rise in prices for domestically produced consumer goods exposed to international competition has been very low this year. in october, prices for these goods were 0. 2 per cent higher than in the same month one year earlier. this probably reflects the strong