The central bank will ensure that economic agents do not believe that inflation of 5 per cent has become the normal level,  29  The new recognition that policy should be based on confidence rather than a series of surprises reflects the influence of theoretical developments on practical policy, c.f. footnote 24. 30  In recent times, central banks throughout the world have become more independent but at the same time more predictable in their communication with other economic agents. This is also related to the new recognition referred to in footnote 24. 31  Norges Bank reports on the conduct of monetary policy in its Monetary Policy Report and Annual Report. Norges Bank’s reporting obligations are set out in § 75c of the Constitution and § 3 of the Norges Bank Act. The Annual Report is submitted to the Ministry of Finance, presented to the King in Council and communicated to the Storting in the Government Credit Report. The Governor of Norges Bank also appears at an open hearing of the Standing Committee on Finance and Economic Affairs. 32  The objective of EMU is consumer price stability in member countries as a whole, rather than stable prices in the individual country. The arguments for a stable value of money are the same as for Norway. 8  BIS Review 136/2008  thereby preventing such a belief from affecting their behaviour. Under an inflation targeting regime, the central bank will accept, when shocks occur, a price increase without having to reduce other prices.
Jan F Qvigstad: On the topic of keeping promises Speech by Mr Jan F Qvigstad, Deputy Governor of Norges Bank (Central Bank of Norway), at a seminar arranged by Norges Bank and Det Norske Videnskaps-Akademi (The Norwegian Academy of Science and Letters), Oslo, 11 November 2008. * 1. *  *  Why is keeping promises so difficult? This house, which now belongs to the Norwegian Academy of Science and Letters, was built by Hans Rasmus Astrup in 1886-87. Astrup was an entrepreneur. At the age of 20, he left Norway for Barcelona on a ship laden with a cargo of dried cod. He gradually built up a large trading business and later became an industrialist, not unlike businessmen of our own era. 1 For innovators and the business sector, a stable operating environment has always been important, providing a foundation for adaptation, economic growth and social progress. A stable value of money is also a component of this foundation. We were taught as children to keep our promises. If we made a promise, we had to make good on it. But we were also taught that we should not promise too much. If we do not keep our word, others lose confidence in us and our credibility takes a toll. In recent months, we have witnessed that this is of particular importance for the financial system. A proximate example is the situation in our neighbouring country Iceland.