Unemployment has risen in all counties and among all occupational groups, except in primary industries. In Sør-Trøndelag unemployment was 3.7 per cent. Unemployment is highest in Oslo, Aust-Agder and Finnmark. It has increased most in Oslo and Akershus in the course of the past year. Even though unemployment in manufacturing has edged up in recent months, the increase in unemployment so far is primarily the result of restructuring and reduced activity in some service sectors. Unemployment has increased most in Eastern Norway, where there is a heavy concentration of these industries. The aviation industry is undergoing restructuring. The ICT industry has reduced activity considerably over the last year. In spite of the slight increase in unemployment, household borrowing has been high over a long period. Over the past year, growth in credit to households has stood at over 11 per cent. House prices remain high. Household financial saving (net lending) has dropped to almost zero in the past couple of years. Strong growth in household consumption will exert continued pressures on prices and wages. There are clear indications that household income is rising substantially. At the same time, the level of financial saving appears to be low. All in all, this suggests that growth in household demand for goods  BIS Review 65/2002  1  and services will remain high. There will probably be a shift in demand towards imported goods and services.
Jean-Claude Trichet: Global capital – surrender of national policies? Lessons from the recent events in credit markets Speech by Mr Jean-Claude Trichet, President of the European Central Bank, at the 17th Frankfurt European Banking Congress “Global Capital – Threat or Salvation?”, Frankfurt am Main, 23 November 2007. *  *  *  Ladies and Gentlemen, Let me start off with one general remark: The present significant market correction with episodes of turbulences should not come as a surprise to us. The ECB, as well as the other central banks, has issued warnings in the past on the global phenomenon of under-pricing of risks. In many respects the present episode can be interpreted as bringing to the forefront anomalies and structural deficiencies which we have identified earlier. While it is too early to make a full assessment, I believe there are some first provisional lessons which can already be drawn at the current stage. A lesson that can be drawn is that the growing complexity of instruments has to be monitored very closely. Structured credit markets are exposed to valuation problems, which make the market very vulnerable to a shift in investor sentiment. In the absence of reliable market prices, instruments need to be valued by models. But estimates which the models produce are highly sensitive to underlying assumptions.