In the recent period of expansion, inflation rose to 3 per cent in 2008, but was restrained without raising the key rate to a high level. 5 The advantages of economic agents anticipating low and stable inflation are now clearly evident. They can be quite sure that inflation over time will be close to 2.5 per cent. This enables interest rate setting to be more effective. When the nominal interest rate is reduced, the real interest rate falls accordingly, and it is this rate that influences decisions made by households and enterprises. Interest rate setting still provides some scope for stimulus. When inflation is anchored, economic agents do not expect inflation to accelerate over a period in Norway even if the krone depreciates. The krone can then decrease in value without monetary policy having to be tightened. This will curb the decline in our export industry. In bad times, a marked krone depreciation might even be necessary to hold up inflation close to 2.5 per cent. In the downturns in 1990 and 1998, the opposite action was taken: the interest rate had to be increased in order to stabilise the krone and keep inflation in check. Even though fiscal policy and monetary policy have had the intended effect, there have been fluctuations in output and employment. We have experienced a period of strong credit growth. During the upturn, the housing market was increasingly marked by the belief that house prices would always rise.
At the company level, the FICS accreditation status recognizes GE Life’s commitment to benchmark the competencies of its workforce to international best practices. At the staff level, the FICS certification status helps promote individual attainment of the standards of professional competency and fair dealing in the insurance marketplace. We hope that GE Life will continue to keep up the momentum to participate in industry-wide efforts to raise the  2  BIS Review 97/2008  professionalism in the industry. We hope that we will catalyse a whole-of-industry involvement in this FICS effort. Conclusion I am therefore delighted this afternoon to present the FICS Accredited Assessment Service Provider award to GE Life. It is both a celebration of your achievements over the last 100 years, and an affirmation of your commitment to continued excellence, building on the core values that have served you so well. May I also congratulate the 12 pioneer candidates who are awarded FICS Certification today. The industry looks to you to uphold the high standards of personal integrity, competency and professional conduct expected of all agents. On this note, I congratulate Mrs Fang Ai Lian and the staff of GE Life on this happy day, and wish you greater success for the next 100 years to come. BIS Review 97/2008  3