This is the key factor for a reduction in interest rates on housing mortgage loans. We believe it is entirely plausible to reduce mortgage interest rates to 8% within the period stipulated in the Presidential decree. Bank lending is certainly an important, but not the only source of financial resources for businesses. Both debt (loans) and equity (capital participation) instruments are important so that companies can raise funds to deliver on the national objective of raising fixed capital investment to 25%. We have already expanded the range of such instruments. We revise regulations to simplify and accelerate the process of security issue for issuers. They already can register bond programmes, which considerably reduce procedural costs. In the near future, they will be able to register issues electronically. Currently, bonds account for 18% of total corporate borrowing, which is more than 7 trillion rubles. Therefore, the accessibility of borrowings for our companies should mean not only bank lending, but also expansion of corporate bonds. However, companies need to expand their capital stock along with the use of debt financing. An improved approach to corporate governance is of paramount importance in raising equity financing. Investors will only invest in enterprises whose operations they can understand, where their rights are protected, and there is a clear picture of how they can earn money. Public companies have, therefore, enhanced the controlling and strategic functions of their board of directors, and will continue further enhancement.
Countries that have attempted to shield their economies from the rest of the world have fallen back into stagnation. Nascent signs of increased protectionism are again giving cause for concern. If this tendency intensifies, international trade and prosperity will be undermined. With its open economy, Norway would be severely affected. It is in our own interest to make an active effort to counteract such a development. Monetary policy – a nominal anchor Against the background of an economic downturn and low interest rates among Norway’s trading partners, the conduct of monetary policy in Norway is challenging. A higher key policy rate might have curbed debt growth and demand pressures in the Norwegian economy. But in an environment of persistently low external interest rates, such a policy would likely have led to a sharp appreciation of the krone, resulting in too low levels of inflation and economic activity. Thus, the crisis in Europe and weak growth in the US are also contributing to keeping interest rates in Norway at a low level. BIS central bankers’ speeches  3  The main objective of monetary policy in Norway is low and stable inflation. This objective provides the economy with a nominal anchor. With firmly anchored inflation expectations, monetary policy can contribute to stable developments in the real economy. Chart 7: Rise in consumer prices The operational target of monetary policy is annual consumer price inflation of close to 2.5 percent over time. Over the past ten years, average inflation has been somewhat below, but close to, 2.5 percent.