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FINANCIAL SECTORS FOR SUSTAINABLE GROWTH Idar Kreutzer, CEO, Finance Norway NFU Conference May 28 2015 2 Economic Outlook • USA – Increased growth – QE-program finished last year – First interest rate hike getting closer • Euro area – Fragile growth, high unemployment rate, low inflation – Quantitative easing – 60 bn. Euro per month until September 2016 – Grexit? • China – Reduced growth – Rebalancing the economy – Weak housing market, high corporate debt and uncertainty in the credit markets causes concern 3 Annual Growth in GDP and Projections. Percentage Source: IMF The financial sector’s contribution to society Value added per hour worked. 2005 prices. 1990-2013 • Credit makes other sectors more productive • Provides risk relief • Large employer and taxpayer • Highly compentent work force and high level of productivity • Norwegian welfare and wage levels require high level of productivity 4 1200 12000 1000 10000 800 8000 600 6000 400 4000 200 Finansierings- og forsikringsvirksomhet Fiske, fangst og akvakultur Utenriks sjøfart Utvinnning av råolje og naturgass, inkl. tjenester (høyre akse) 2000 0 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Source: Statistisk sentralbyrå Tax payment for some sectors. Sum 2007-2012. Mill NOK 100,000 80,000 60,000 40,000 20,000 Bygg og anlegg Industri Varehandel mv. Finansiering og forsikring Source: Statistisk sentralbyrå The financial sector – A productive sector with unused potential Growth in productivity and employment Norwegian mainland industries, 1990–2010 (deviations from the average for industries) 300 % Employment growth 250 % 200 % 150 % 100 % 50 % Information and communications 0% -100 % -50 % 0% 50 % 100 % 150 % 200 % Retail etc -50 % Finance and insurance business -100 % 5 Source: Victor Norman, NHH Growth in productivity Tillit er grunnsteinen for en velfungerende finansnæring 6 Sustainable growth • New EU Commission: Job creation • Policy framework for financial services: – Innovation friendly – Fight fraud, protect consumers – Financial stability • Is there a correlation between goals and instruments? Need calibration Need forfor calibration 8 9