measures to contain it. during the lockdown phase in march and april, it was of particular importance to support workers and firms affected financially. unnecessary bankruptcies had to be avoided and the ties between employers and employees maintained. the fact that the norwegian economy has weathered the crisis fairly well reflects the strong contribution of targeted fiscal measures, along with good welfare arrangements. the primary task of monetary policy is to maintain low and stable inflation, with a target of annual consumer price inflation of close to 2 % over time. but monetary policy shall also contribute to high and stable output and employment and to counteracting the build - up of financial imbalances. by lowering the policy rate quickly and sharply, we helped to dampen the downturn by making it easier for indebted norwegian firms and households to weather a demanding period. a policy rate cut generally strengthens household finances given the large proportion of residential mortgages, primarily at floating rates. even though containment measures constrain activity in some sectors, low interest rates contribute, all else equal, to boosting consumption and investment. an example is the lift in housing investment from high turnover and price rises in the housing market, which then boosts overall economic activity. the interest rate level also has an impact on the krone exchange rate, which in turn is important for firms that compete in a global market. acting through these channels, monetary policy helps to ensure that the downturn is not needlessly protracted and helps to reduce the risk that unemployment becomes entrenched at too high a level. inflation is now above the inflation target, but we have always held the view that this has been a transitory consequence of the sharp krone depreciation in spring 2020. low economic activity and high unemployment have a dampening effect on wage and price pressures, and we expect inflation to fall below the target in the coming year. an expansionary monetary policy stance contributes to normalising economic activity, which will in turn contribute to pushing up price and wage inflation further out. last year we were concerned that a fall in house prices would amplify the economic downturn. the situation has since reversed. high house price inflation over the past year reflects low interest rates, but the covid - 19 pandemic itself has likely increased the willingness to spend money on housing. we are at home more and are less able to spend money at restaurants, on travel or on other experiences. a sharp rise in house prices tends to be followed by faster growth in

philosophy behind risk taking in norges bank. first and foremost, it is important to have a clear separation between activities directed towards achieving beta - exposure and activities linked to active risk taking. in that way, a true assessment of realised returns as well as costs associated with active management is possible. moreover, active risk taking is done with humility and with a strong belief in the effectiveness of markets. hence, we mostly apply active bets when we think we, either internally or through our external managers, possess an informational advantage. such an advantage is sought through a high degree of specialization. another type of active position is based on collecting risk premiums where we as an investor have a comparative advantage to bear the risk. an example of this is liquidity premiums. it has been a challenge to us to establish a professional and vigilant business culture within the central bank. i think we have succeeded. an important instrument in this respect has been performancebased remuneration for the bank's investment managers. the investment management wing of the bank now resembles a private investment manager rather than a typical central bank investment office. in particular, all investments are delegated to professionals in a clear line structure. but recruiting and keeping skilled human capital requires more than competitive wages. whether we succeed will depend on our ability to create an environment where such capital can thrive and prosper. our philosophy is to stimulate ownership of decisions and empowerment in the investment process – and that is appreciated by our managers. moreover, the mere importance of the mission, as formulated by our board, "... to safeguard and grow financial wealth for future generations through highly professional management coupled with strict integrity ", is attracting resources in and of itself. to wed a business culture to a central bank, with its civil service responsibilities, has posed a challenge in terms of adapting the bank's governance system to the increased importance of professional investment management. elements in addressing this include a strengthened focus on accountability by a clear division of responsibilities and a system of checks and balances. maybe the most important element in our governance system is the establishment of a high degree of transparency for the public by providing open information on performance, risks, costs and investments on a timely basis. all in all, we feel the challenge of managing the fund has enriched the organisation by forcing the central bank to think outside of the box. and perhaps the central bank perspective and values have added to the depth and long - term horizon of the investment organisation. let me round