Understanding Risk Management and Compliance, What Is Different After Monday, January 25, 2016
Winston Churchill believed that a pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.
There is risk in every opportunity. This is the reason we need to undrerstand the principles of Opportunity Risk Management (ORM). Today we have a good example.
“In 1969, on the day before Christmas Eve, Norway as a nation received the gift of the century: we struck oil!
The Ekofisk oil field was the largest subsea oil field ever discovered. The discovery of oil was the start of an extraordinary era for the Norwegian economy.”
This is such an interesting speech by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), at the “Desemberkonferansen” oil and gas conference, Kristiansund.
After some paragraphs, we read: “But this dependence on oil has also made the Norwegian economy vulnerable to changes in oil prices or a decline in petroleum revenues.”
“As activity and earnings from the petroleum sector decline, oil service companies must seek entry into other markets. With a high domestic cost level, that task may prove demanding.
“A necessary adjustment of the cost level can occur in two ways: through lower wage growth than in other countries or through a depreciation of the krone exchange rate.”
Read more at Number 4 below.
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