Such changes in the European financial scene have significantly improved the efficiency of capital allocation. The euro contributes to enabling European savers to easily select the most efficient investments. It also helps the productive sector and companies to achieve significant economies of scale, enhances the transparency of the market and boosts competition and innovation to the benefit of consumers. Moreover, the pace of internationalisation of the euro area economy has been further spurred by the euro. Allow me to give just one example, the level of French accumulated foreign direct investment abroad since 1999 has been of the order of magnitude of EUR 380 billion (a pace four times as rapidly as before the setting-up of the euro, and the same order of magnitude as the United States’ FDI abroad). The international role of the euro The euro has become a major currency in the world. As an official reserve currency, it is the second most widely used. As a bond issuance currency, according to the most recent statistics from the BIS, the euro has played a substantial role since the end of 1998 and accounted for around 35% of total issuance in 2001. The share of the euro in international bank assets has also increased significantly over the past two years. Furthermore, the euro constitutes a major reference currency for exchange rate regimes adopted by third countries. Over 50 countries in the world, mainly in Europe and Africa, are managing exchange rate arrangements that include a reference to the euro.
All regions of the country have reported an increase in unemployment in the past year, although in Central Norway the increase has been relatively low. This is probably related to the industry structure with a relatively high share of employees in the public service sector. Reports from the regional network indicate that employment in the public sector will remain more or less constant in the period ahead, while there are indications of growth in some private business sectors. The start-up of Rica Nidelven Hotel generated 100 new jobs but also keener competition in Trondheim’s hotel industry. As I mentioned earlier, this snapshot report on the current situation in this part of the country and similar reports from the other regions provide information that is important to interest rate setting. Interest rates were left unchanged at Norges Bank’s Executive Board meeting on 29 October. The sight deposit rate therefore remains at 2.5 per cent. According to Norges Bank’s assessment, with an interest rate of 2.5 per cent, the probability that inflation two years ahead will be higher than 2½ per cent is the same as the probability that it will be lower. By using a time horizon of two years when we set interest rates, monetary policy contributes to stabilising output. The choice of this horizon prevents monetary policy from contributing to unnecessary volatility in the economy. 8  BIS Review 50/2003