In line with this, the Committee proposes a general clause for the Bank’s activities and that the Council of State be authorised to lay down further guidelines in a number of areas”. Carsten Smith (1992): Rettstenkning i samtiden [Contemporary legal thinking], p. 410. Universitetsforlaget. BIS Review 154/2010  11  In its consultation statement on the new Norges Bank bill, the Ministry of Justice through its Legislation Department expressed the view that the right to issue instructions should be in closer keeping with ordinary rules relating to government administration, adding: “We note for the record our agreement that there are strong arguments for limitations on instructing Norges Bank on the exercise of its authority. From a legal standpoint, however, there should be no doubt that the power to do so exists and that this power should be formulated in a manner which does not make it virtually impossible to exercise it in practice”. The views of the Legislation Department were not taken into account. The relevant section of the Act was worded in such a way as to make the power to instruct the Bank virtually impossible to exercise in practice. Nor has it ever been applied in individual cases, except when the inflation target was introduced in 2001 after consultations with Norges Bank. Norges Bank has, in Getz Wold’s words from 1972, followed up the inflation target loyally and actively. The instruction section does not prevent Norges Bank from setting the interest rate independently of pressures from the central government authorities.
So I had placed myself on the sideline, but I compensated by offering to chair a number of public commissions.” 26 Governor Knut Getz Wold wrote in 1972 that: “Norges Bank’s position today in relation to the government authorities is not, however, defined by a formal right to make decisions on specific issues, but by its role as advisor …”. He went on to say: “Norges Bank has limited direct power. This is as it should be. But it has, and should have, influence. If store is to be set by its word, it must keep abreast of developments at home and abroad. The Storting and the government have the final word. Having said that, Norges Bank will loyally and actively follow up their decisions.” 27 In 1973, the efforts to develop an economy under strong centralised coordination and control culminated in a proposal to establish an incomes policy council with regulation of wages. 28 The proposal was logical. It was the last wall in the structure erected after the war. Coordination and regulation were important key words.