But, from experience, we know that some uninsured, unsecured liabilities are not as reliably loss absorbing in resolution as others and, in practice, it has been difficult to break into the senior class. In part this is due to an absence of legal powers to facilitate this – and the BRRD addresses that problem. But in part it is because of the potential adverse consequences of taking resolution action within a class which includes liabilities that it is difficult to bail-in and where, although we have the power to exercise discretion in exceptional circumstances, it is undesirable and legally risky to rely on this discretion. Just as we require G-SIBs to maintain high-quality, long-dated capital instruments that can reliably absorb losses in a going-concern in order to reduce the probability that they fail, so too we should require G-SIBs to maintain high-quality, long-dated liabilities that can reliably absorb losses in a gone-concern, in order to reduce the probability that they fail in a disorderly way. So, which liabilities are sufficiently reliably loss absorbing in resolution to count towards a firm’s GLAC? Well, any liability that meets the following conditions: •  First, it must be sufficiently likely that the liability will actually be there when the firm enters resolution. The BRRD requires that, in order to count toward MREL, liabilities must have a residual maturity of at least 12 months. •  Second, the liability must be within the scope of the relevant authority’s resolution tools.
Clothing imports are not the only imports from low-cost countries that have exhibited strong growth. The share of our imports from these countries also seems to be rising for other goods, such as audiovisual equipment, furniture and white goods. This is pushing down the rise in prices for imported consumer goods. Structural changes in world trade have been important for the Norwegian economy, not least for the rise in prices for imported goods and services. We assume that the shift in imports towards low-cost countries will continue, with an attendant dampening effect on inflation. This effect will be countered by the increase in prices for oil and other commodities that is expected to result in a somewhat higher rise in producer and export prices among our trading partners. Monetary policy and the economic outlook in Norway and abroad Monetary policy in Norway is oriented towards low and stable inflation, with annual consumer price inflation of close to 2.5 per cent over time. This is also the most important contribution monetary policy can make to sound economic developments in the long term. Low and stable inflation provides the economy with a nominal anchor. This contributes to predictability for those who take decisions about saving and investment today, although the result of those decisions depends on how the economy develops in the future. In its conduct of monetary policy, Norges Bank operates a flexible inflation targeting regime, so that weight is given to both variability in inflation and variability in output and employment.