Saving is high both in oil-producing countries, China and other Asian countries. Long-term interest rates in Norway largely shadow external interest rates because like other countries Norway is keeping inflation in check. Norwegian households primarily finance house purchases by means of floating-rate loans. Long-term interest rates are still of considerable importance because  BIS Review 15/2007  9  they provide information about the future path of short-term interest rates that borrowers can expect over time. Unusually low short-term interest rates have probably also boosted the rate of increase in house prices in recent years, but this particular effect will be reversed when the interest rate is raised to a more normal level. Developments in short-term interest rates have influenced the path for house prices over the past 15 years, but periods of low interest rates are followed by periods of higher interest rates. Norges Bank’s policy rate is therefore of limited importance for house price inflation over a period of 15 to 20 years. The housing stock in Norway, which numbers a good 2.2 million dwellings, shows little change from one year to the next. As a result, higher demand for housing will primarily translate into higher prices in the short term. In the 1990s, housing starts in Norway were fairly low in relation to growth in the number of households. Moreover, population growth has been higher in recent years, largely reflecting a high level of immigration.
It naturally adapts to the different economic development stages the country and the state go through. I do believe there cannot be a developed and well-integrated economy without open, integrated, efficient, transparent and well-regulated markets. Therefore, it comes out clearly that the development of the interbank market is in all stakeholders’ interests: the banking system itself, the Bank of Albania and the economy on the whole. Being fully aware of this, the Bank of Albania has built a clear strategy in terms of: 1. Deepening and broadening the money market in Albania further;  2. Creating relevant market instruments;  3. Establishing a close and rational cooperation with the banking system and the financial market in general;  4. Ensuring a clear and constant communication with the market operators and the public at large;  5. Providing modern technological solution. As a result of these initiatives, our monetary policy is now entirely based on indirect instruments of monetary management, which operate in line with the open market logic. Our operational framework allows the banking system to manage the liquidity effectively, being a counterparty of the last resort to meet the system’s aggregate needs for liquidity or invest it. Via the required reserve, the Bank of Albania has provided you with enough room to cover your unexpected liquidity needs, at a remuneration rate close to the market interest rates that  BIS Review 97/2010  1  avoid the distortions the required reserve may yield to your banking business.