Would it be acceptable to use tax-payers money to refund foreign depositors at a larger scale? This might pose problems both for the home and host country. The wide divergence of national systems clearly needs attention. Potential solutions might include increased co-operation and harmonisation regarding fees and entry and exit rules. Crisis management. National central banks have national mandates in extending emergency liquidity assistance. In a future integrated European financial market, the mandate of the lender of last resort will not be as clear-cut. How should this function be organised when the largest banks might be systemically important in several EU member countries? There will also be banks that are very important in one country while being completely insignificant in a European context. Another issue is whose interest a national supervisor will protect in a crisis involving a cross-border banking group strictly its own national interest (the case now) or the interest of all member countries where the group might have operations? Conclusions These issues, or challenges, are essentially political. They are about how to share the risks and costs of financial integration. And as long as these challenges are left unaddressed they constitute political barriers to integration. We all say we want financial integration but as usual, nothing comes for free. Financial integration brings some difficult issues for authorities and politicians. Public authorities will have to rethink their roles and priorities.
Fiscal policy has had a significant impact as a countercyclical tool. Since 2013, the increase in oil revenue spending has roughly matched the fall in oil investment. Chart: Investment Low interest rates and high public demand have resulted in robust growth in the public sector and the construction industry. With high house price inflation, housing investment has increased substantially. Investment in 2/4  BIS central bankers' speeches  housing is now higher than investment in oil activity. Chart: Growth in mainland GDP The economy is now turning the corner. Contacts in Norges Bank’s regional network have reported gradually rising growth. The upturn seems to be broadly based across industries and regions. There are clear signs that unemployment is falling both in oil-dependent regions and in the rest of the country. At the same time, employment growth has been modest, and some of the decline in unemployment is the result of labour market withdrawal. Looking ahead, there are prospects that employment will increase as growth in the mainland economy picks up, partly driven by mainland corporate investment, which seems to be picking up. Oil investment is also expected to show a moderate upswing as from next year. Export growth is also likely to pick up, supported by growth among Norway’s trading partners. At the same time, there is reason to expect less fiscal stimulus ahead. The Government has adjusted the fiscal rule for oil revenue spending.