House prices in Norway have on average risen by 9 per cent annually between 1995 and 2002. House prices have also increased considerably in other countries. A sharp and sustained rise in house prices might contribute to high credit growth even after prices have levelled off. Since only a portion of the housing stock is sold each year, some dwellings will be sold at a higher price than when they were last sold for a long period. This has contributed to sustaining the high level of growth in credit to households in Norway even after the rise in house prices moderated through 2002 and into 2003. It is easiest to sell dwellings in the largest cities and some specific areas are particularly attractive. Residential property is now a fairly liquid and attractive investment. A persistently high rate of increase in house prices may in isolation engender expectations of a further rise and may thus prove to be selfreinforcing for a period. Moreover, there now seems to be a tendency towards investing in property and incurring loans at a more mature age so that younger generations not only inherit dwellings, but debt as well. Both debt and wealth are on the rise for these more mature age groups. Sharp increases in asset prices and debt accumulation may pose a risk to economic stability. With a view to mitigating this risk, it will be appropriate in some situations to apply a somewhat longer-thannormal time horizon than two years to attain the inflation target.
Mohd Razif bin Abd Kadir: Shared services and outsourcing in the Malaysian financial sector Address by Mr Mohd Razif bin Abd Kadir, Deputy Governor of the Central Bank of Malaysia, at the Shared Services and Outsourcing in the Financial Sector – A Joint Forum by Bank Negara Malaysia and the Multimedia Development Corporation, Kuala Lumpur, 13 November 2007. *  *  *  Distinguished guests, ladies and gentlemen, It is with great pleasure that I welcome you to the inaugural forum on shared services and outsourcing (SSO) in the financial sector. This forum is jointly organised by Bank Negara Malaysia and the Multimedia Development Corporation in a cooperative initiative to enhance the significance of SSO in the Malaysian financial sector. The organisation of this event, which focuses specially on the financial services industry and its players, is a timely bringing together of minds to discuss the issues and concerns faced by financial institutions in SSO. The growing significance of the global SSO market suggests to the financial industry players that the outsourcing of operations which would otherwise be performed in-house is certainly an idea worth exploring. According to a recent study by Frost & Sullivan, the global SSO market was estimated to be worth $ billion in 2006 and is forecasted to reach a market size of $ billion by end-2009. Further, the banking, financial services and insurance sectors had the largest SSO spending in 2006 at an estimate of $ billion or almost a third of total SSO spending.