There is also a risk that large imbalances in world trade and low employment in Europe will trigger protectionism, which could reduce growth capacity even further. A pronounced slowdown in growth in the entire OECD area is also likely to lead to markedly slower growth in China and emerging economies in Asia because exports are an important driving force behind growth in the region. This could lead to an appreciable fall in prices for oil and other commodities and slackening activity in the shipping industry. In the same way that Norway has benefited strongly from the sharp international upswing in recent years, the Norwegian economy could be relatively hard-hit by such a downturn. For example, activity in the petroleum industry might decline considerably. The change in China’s exchange rate regime and the revaluation of the Chinese currency by 2 per cent will probably not cause substantial changes in the imbalances in world trade. However, the gradual occurrence of major changes in the same direction cannot be ruled out. This would reduce  demand for the US dollar. Subsequent developments will depend in part on whether the fall in demand for the US dollar is abrupt or gradual. Structural changes in world trade have been important for the Norwegian economy, not least for the rise in prices for imported goods and services. The shift in imports towards low-cost countries has come gradually since 2001. In the Inflation Report projections, we assume that the import pattern will gradually become more stable.
The resolution frameworks, in step with the text of the Directive, are structured in three phases: prevention; early intervention; and resolution in the true sense of the term. 1.- In the preventive phase, recovery and resolution plans must be designed. Recovery plans are drawn up by the banks themselves and should include a series of actions relating to the institution’s capital and liquidity in order, should the case arise, to restore its financial equilibrium. Supervisors must revise these plans, identifying potential impediments to their proper application. Resolution plans are agreed by the resolution authorities and seek to establish a catalogue of actions that the authorities might take in situations in which a credit institution is close to non-viability. 2.- For the early intervention phase, supervisors are entitled to take measures before a bank’s financial position deteriorates irremediably. These measures have helped bolster conventional tools, such as limiting dividend pay-outs. These new measures include most notably the possibility of altering a bank’s business strategy or the power to call for legal changes in a bank’s structure. 3.- The third, resolution phase is what leads to the reorganisation of a credit institution, making use of specific mechanisms. Most prominent in this connection has been the socalled bail-in, involving rescuing a bank from the inside, as opposed to the traditional publicsector bail-out. A bail-in entails the possibility of cancelling – or converting into capital – the entitlements of specific shareholders and creditors of credit institutions in a position close to insolvency.