This may curb growth in the Norwegian economy and lead to higher wage and cost inflation. Inflation is expected to pick up ahead. The upturn has also benefited the financial industry. Strong economic expansion has pushed up an already high level of lending growth. As a result, total assets in Norwegian banks and mortgage companies have risen sharply over the past decade. Growth in lending to households has been high since 2000, but growth in corporate lending showed a sharp rise towards the end of 2005. Profitability in the financial industry in Norway has been high. What is the outlook ahead? Will strong growth continue? The strong rate of growth we have witnessed in the past few years is not sustainable over time. Capacity utilisation is very high with labour shortages in many sectors. Monetary policy must be oriented to bringing inflation up to target while avoiding an overheating of the real economy. The scenario ahead, then, is a continued upward adjustment of the interest rate while curbing the high rate of economic growth. It is likely that credit growth will gradually slow, and this may also pose challenges for banks. I will return to this later. Risks to financial stability in Norway In Norges Bank’s most recent Financial Stability report, published in June, we concluded that the overall outlook for financial stability was satisfactory. We nonetheless highlighted a number of factors that might constitute a risk.
Thomas Jordan: Strong Swiss franc and large current account surplus – a contradiction? Introductory remarks by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the Swiss Institute of International Studies, Zurich, 19 February 2013. *  *  *  The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch)  For almost 18 months now, the Swiss National Bank (SNB) has been enforcing the minimum exchange rate of CHF 1.20 per euro with the utmost determination. The need for this measure is widely recognised, both domestically and abroad, due to the substantial appreciation of the Swiss franc in summer 2011. At the same time, however, there are isolated voices claiming that given the large current account surplus, the Swiss franc is too weak, and that the SNB should allow the currency to appreciate in order to contribute towards reducing global imbalances. This view is based on a lack of knowledge about the situation in Switzerland. Specific factors are responsible for the Swiss current account surplus. The balance on the trading account, for instance, makes only a modest contribution. The most important elements with regard to the current account surplus are the following: first, investment income from Switzerland's substantial net international investment position, second, financial sector earnings from business with customers abroad, which is traditionally of significance for Switzerland, and third, earnings from merchanting, which have risen sharply over the past decade. The current account surplus is also statistically overestimated.