As supervisory authority, Norges Bank will follow up efforts in the area of cyber security, in collaboration with Finanstilsynet (Financial Supervisory Authority of Norway). Here, the interests of the authorities and the financial industry coincide. Let me once again encourage the industry to work out satisfactory solutions. A great deal has already been done and collaborative bodies have been established at a national level. However, initiatives in this area are still rather fragmented. There is a need for an even more coordinated and targeted effort to obtain overall control and reduce risks. The system owners must ensure that critical IT providers have established robust contingency solutions and that these are tested regularly. If this is not done, the system owners are obliged to assess alternative solutions, also if they are costly. The responsibility of the system owners is the same, irrespective of whether the entire technical operation or just parts of it are outsourced. Offshoring is increasing. More flexibility, lower costs and a larger pool of persons with requisite skills are good arguments. At the same time, offshoring entails other forms of risk. Norwegian control is reduced. We become dependent on infrastructure and authorities outside of Norway. It would help if, in a crisis, operations can be moved back to Norway at short notice. It is still possible that in the future, critical systems will be required to be permanently operated from Norway. Electronic central bank money Making payments electronically involves the use of deposit money (money deposited in banks).
This provision builds up a buffer during the benign part of the cycle, which starts to be released when recession comes knocking on banks’ doors. Counter-cyclicality is intrinsic to dynamic provisions and part of its usefulness can be seen in the resilience shown so far by Spanish banks in the current crisis. Furthermore, its direct impact on the profit and loss account (reflecting losses at a time when these losses are really being built up in balance sheets) constitutes a way to make banks more aware of how credit must be priced, reducing the underestimation of loans risk premia and, to some extent, compensating the relaxation of credit granting standards in good times. It also delivers the right information to investors about the financial position of the bank. In all, dynamic provisioning allows a proper recognition of credit risk. I must also admit that there are voices raised by some institutions that do not agree with this view, and particularly, accounting standard setters. In this respect, we should call for further dialogue between accounting rule setters and supervisors as well as a clarification regarding roles and objectives of each of them. I really think that our objectives are compatible and that delivering the relevant information to investors should not be an impediment for supervisors to ensure the stability of the banking sector by promoting the most adequate measures that experience and results have proved to be useful. Very much in line with dynamic provisions, the buildup of capital buffers also deserves room in our discussions.