By setting up the Fund – with investment abroad – it became possible for Norway to establish a path for the production of oil and gas that is independent of the profile for petroleum revenue spending. The alternative to a fund would have been to regulate the extraction path by putting a conservative upper limit on annual extraction. The Fund serves as a buffer between wide swings in petroleum revenues and domestic spending. The decisions on annual revenue spending can be made independently of the size of the revenues. As a result, swings in petroleum revenues do not have an automatic impact on the Norwegian economy. The existence of the Fund contributes to stabilising the NOK exchange rate, and countercyclical economic policies are more effective for a country with net foreign assets. The virtues of the fund structure are many. The authorities have established a transparent system for managing government petroleum income as all oil revenues are transferred directly into the Fund. The Norwegian parliament must adopt a resolution on any use of the return or the capital of the Fund. Oil revenues are not earmarked. There is no hidden use of revenues, or any use for special purposes. The Fund is strictly and effectively "out of bounds" to special interests. It is important that this remains a feature in the future. We now have close to fifteen years of a rapidly expanding Fund behind us, and it is becoming more likely that the fund will be a very long-term savings plan.
The HKMA endorsed this consensus and issued a circular in June 2004 requesting banks to implement such security measure by June 2005 for high-risk retail Internet banking transactions (such as fund transfers to non-designated accounts). Two-factor authentication is a security measure recognised by the information security industry to combat Internet banking frauds. In addition to the normal login ID and password, a customer needs a second factor which is in his or her physical possession for additional identity verification. This second factor should be difficult to be stolen together with the customer’s login ID and password by fraudsters over the Internet. We believe that this is an effective way in tackling the latest Internet banking frauds such as fake bank websites, phishing e-mails and Trojan software. We understand that a number of banking supervisors in other financial markets are currently reviewing the implication of the latest Internet banking frauds and consulting their banks in relation to the adoption of two-factor authentication for Internet banking. Hong Kong is one of the first places to offer such security measure to bank customers. So far the implementation of two-factor authentication has been progressing satisfactorily. All banks offering high-risk retail Internet banking transactions will allow customers to apply for two-factor authentication from next month. Individual banks may offer different two-factor authentication methods to customers. Three common methods being adopted by banks in Hong Kong are digital certificate, security token-based one-time password and SMS-based one-time password.