His words made waves in Luxembourg, where banking sector assets are more than 22 times gross domestic product — far and away the highest in the euro zone, according to Lombard Street Research in London. Share this video...
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This was a view corroborated by the chief economist of Norway's largest bank, DNB, at the weekend, when he said that the country's greatest challenge was deciding how to spend its "huge" oil wealth. Download the latest Flash player and try again. While acknowledging the debate about how to use the oil revenue, Swedbank First Securities' Harald Magnus Andreassen said that irrespective of who gained power on Tuesday, fiscal policy was not about to be revolutionized.
Its economy accelerated in the second quarter of this year to grow by 0.
Another concern for economists is Conservative Leader Erna Soldberg's argument that Norway's banks should loosen credit standards, potentially exacerbating the country's housing boom. Sign up for free newsletters and get more CNBC delivered to your inbox. The so-called Dutch disease is the negative impact of sudden, large increases in a country's income — for example, a boom in natural resources exploitation — which causes the currency to appreciate, making the country's exports less competitive.
Dijsselbloem said. The term was coined in the 1970s to describe the decline of Dutch manufacturing after the Netherlands discovered a large natural gas field. Open in the app.
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Howat said that a Conservative-majority might exacerbate both Norway's housing boom and its reliance on the energy sector. That's 11 more seats than needed for the majority.
While the Conservative party has campaigned on its ability to keep the public purse in order, economists said that fiscal policy was likely to become more expansionary in the country, irrespective of who gained power. In contrast, Norway's regulatory bodies have urged banks to cap loan-to-value ratios, and to triple the risk-weights they assign to mortgage assets. A version of this article appears in print on in The International Herald Tribune. As Norway's opposition Conservatives swept to power in elections on Monday, analysts warn the country's economy is at risk of overheating, due to rising oil prices and a debt-fueled housing boom.