When Norges Bank had finished collecting the silver tax around 1820, the Bank’s silver holdings came to somewhat more than 50 grams per inhabitant, which is the equivalent of about one silver spoon. The value of the Fund has just recently exceeded NOK 5 trillion, or about NOK 1 million per inhabitant. It is the political authorities – the Government and the Storting – that define the investment framework for the Fund. Norges Bank is charged with the operational management of the Fund and ensuring compliance with the guidelines. Within the framework established by the Ministry of Finance, Norges Bank shall aim to achieve the highest possible return. The investment management function has to a large extent been delegated from Norges Bank’s Executive Board to Norges Bank Investment Management – or NBIM. Chart 8: Cumulative value of the Government Pension Fund Global (GPFG) The Fund’s results have been favourable. Since 1998, the cumulative return on the Fund has been close to NOK 1 800 billion, which is more than a third of the Fund’s total value. So far, our nation has earned a solid return on its investments. Chart 9: Real return on the GPFG and estimated spending High returns in recent years have contributed to an average annual real return since start-up of close to 4 percent, while the spending of petroleum revenues over the fiscal budget accounts for a smaller percentage of the Fund than earlier.
1  The Scandinavian Journal, 1799, in The travel diaries of Thomas Robert Malthus, edited by Patricia James, Cambridge University Press (1966). 2  See Norges Bank Working Paper 23/2013, Contributions to a history of prices in Norway: Monthly price indices, 1777–1920, by Jan Tore Klovland. BIS central bankers’ speeches  1  The Storting delegated the task of supervising the monetary system to Norges Bank, which was established in 1816. The king would no longer have the authority to print money at will. At its inception, Norges Bank’s head office was located in Trondheim, a twelve-day journey from the government in Christiania, and even farther from Stockholm3, giving the central bank a geographical – and not just formal – distance from the government authorities. The value of money would be guaranteed by a stock of silver and a silver tax was introduced. But establishing confidence would take many years. The banknotes that were printed were not fully redeemable in silver until 1842. Since then, the value of Norway’s currency has been fairly stable for long periods, but we have also experienced periods of deflation, high inflation and waning confidence. The lesson has been the same every time: restoring confidence comes with a cost. Much has happened since 1814. Norway no longer lags behind other western economies. Inflation is low and stable. We have established a clear division of responsibility for economic policy and well developed institutions founded on the Constitution written at Eidsvoll 200 years ago.