Even though we have called a pause in our asset purchase programme, the effects of past purchases will continue to work through the economy for some time to come. The aim of quantitative easing is to boost the supply of money, push up a wide range of asset prices and facilitate finance through the capital markets, thus raising nominal demand in the economy. How well is quantitative easing working? Chart 3 shows, for the two days following each successive announcement about the scale of the asset purchase programme, the movements in: average gilt yields; the expected average level of Bank Rate over the same maturity (from Overnight Indexed Swap rates); and the spread between them 1 . That suggests gilt yields are lower as a result of the programme by a total of around one percentage point. Moreover, since the programme began, investment-grade corporate bond yields have fallen by almost four percentage points, equity prices have recouped half their  1  The impact is measured by the change over two days in the average 5 to 25 year (zero coupon) gilt spot rate.
We also focus on topics that influence the development and regulation of companies’ input factors – both regarding human resources such as labour, in particular children’s rights, and natural resources such as access to clean water and clean air. Norges Bank’s Executive Board has established a set of principles and a strategy for the exercise of ownership rights. Openness and transparency are key principles in the management of the Government Pension Fund – Global, and we aim to be as open as possible about our active ownership work. Our active ownership is practised in a number of different ways: through the exercise of voting rights, through dialogue and engagement with individual companies, through collaboration with other investors, through submissions to the regulatory authorities, and through research and public communication. We aim to vote at all general meetings of the companies in which the Fund has shares. We voted on 68 724 items at 7 871 general meetings in 2008. 4  BIS Review 58/2009  The impact of the crisis on the Norwegian Fund The Norwegian Fund has been hard hit by the crisis. In 2008, the total return on the Fund was a negative 23 per cent, the weakest in the Fund’s history. There was a negative return of 41 per cent on the equity portfolio, while the return on the fixed income portfolio was close to zero. The real rate of return after costs has been 1 per cent since 1998. This is well below the assumed long-term return of 4 per cent.