from us shale oil is more than twice as high as norwegian oil production. estimate based on calculations in blix prestmo, strøm and midsem ( 2015 ) : ringvirkninger av petroleumsnæringen i norsk økonomi [ spillovers from the petroleum industry to the norwegian economy ]. forthcoming report from statistics norway. petroleum - related exports from mainland norway are also included. share of home - owning households. debt is here defined as gross debt less bank deposits. bis central bankers ’ speeches even though the price decline is putting a brake on exploration activity and the development of new fields, we can expect further advances in the new technology and its wider use. looking ahead, we must prepare ourselves for an environment of lower oil prices compared with the levels seen in recent years. it would be unwise to act on the assumption that oil prices will again settle around usd 100 per barrel. it has long been clear that activity on the norwegian continental shelf would decline. the fall in oil prices in recent months has accelerated and amplified an announced decline in activity. norwegian exporters of oil - related goods and services to other oil - producing nations may also face a decline. this does not mean that the oil age is nearing an end. nearly half of known oil and gas reserves on the norwegian continental shelf have not yet been extracted. 4 over the past few years, large new discoveries have been made. one of them – johan sverdrup – will soon be ready for development. the norwegian oil service industry can expect new orders. nonetheless, the norwegian economy must adapt to considerably lower demand from the oil sector. from being in a unique economic position, norway is now headed for a period of restructuring. the norwegian business sector showed a high degree of willingness and ability to shift to oilrelated activity during the boom. the proximity to the continental shelf was an advantage for many firms. the shift to an oil - driven economy with a high wage capacity has been a comfortable journey. the journey forward, where the oil service industry must downscale and other trade - exposed industries must grow, will be more challenging. after many years of relatively high wage growth in norway, the domestic cost level must again be brought more closely into line with that of our trading partners. a necessary adjustment of the cost level in norway can occur by means of lower wage growth in norway than in other countries and a depreciation of the krone exchange rate. the economic policy

related to very low risk premia. it should also be noted that several demand - related factors, such as bond purchases by euro area insurance corporations and pension funds, might have played some role in keeping long - term bond yields at low levels, although it is difficult to quantify the impact with precision. as already noted, the bout of volatility across a broad range of financial markets during may and june 2006 was comfortably absorbed both by markets and institutions. however, to the extent that the “ search for yield ” in a low interest rate environment has led to this “ pricing for perfection ” in other financial markets, long - term rates and risk premia could have been driven too low especially in credit markets and those of emerging market economies [ see chart on the right of slide 4 ]. this means that valuations in these markets could prove vulnerable to several potential unanticipated adverse disturbances including a renewed spike in oil prices, a pick - up in the demand by non - financial firms for external funds should profitability weaken, or a change in global asset allocation. such triggering events could have the potential to bring about possible abrupt increases in bond yields, spreads and risk premia across mature and emerging capital markets. if a triggering event of sufficient severity were to occur, it could bring about an abrupt increase in longterm yields, and credit and equity risk premia across mature capital markets and emerging market economies. this would imply significant asset portfolio losses for banks and other financial institutions. more importantly, it could also raise the counterparty risks some banks face vis - a - vis hedge funds in case it would trigger a cluster of hedge fund failures. as to the second issue for financial markets, credit derivatives markets have been growing at an exponential rate over recent years, not only in terms of size but also in terms of the complexity of products. [ see slide 5 ] the development of these markets is undoubtedly contributing to the efficiency and stability of the financial system by allowing financial intermediaries to measure and manage their credit risks more efficiently and effectively, primarily by buying protection in the credit default swaps ( cds ) market. at the same time, there have been concerns that rapidly increasing credit risk transfer ( crt ) activity may be leading to concentrations of risk among agents who might not be able to bear it in a more challenging environment, particularly in the case of the more complex structured credit products where investors may have been attracted by high short - term returns. in 2003, the banking supervision committee