Liquidity supply in connection with the year 2000
The work to prepare computer systems in the financial sector for the year 2000 seems to be under control in industrial countries.
However, there still seems to be some fear in financial markets that a shortage of liquidity may occur around the turn of the year. This is reflected in the interest rates on financial instruments maturing directly after the turn of the year.
As a natural part of its preparations for the Y2K, Norges Bank has elaborated plans for liquidity policy based on various scenarios. "Norges Bank will, in connection with the upcoming turn of the millennium, supply sufficient liquidity to the money market, as it normally does," says the Governor of Norges Bank, Svein Gjedrem. Norges Bank's liquidity policy instruments allow the Bank to provide large quantities of liquidity rapidly should this prove necessary. The list of eligible securities that can be furnished as collateral for access to liquidity from Norges Bank was expanded to a large extent on 1 September 1999. Pursuant to §7 and §16 of the regulation on banks' access to loans and deposits in Norges Bank, Norges Bank may under special circumstances depart from the collateral requirement.
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