Øystein Olsen: The Norwegian economy and the sea Speech by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), at a business sector seminar, in connection with the launch of the new 100-krone and 200-krone banknotes, Lofoten, 30 May 2017. * * * Accompanying slides This is a day I have been looking forward to for a long time – it’s not every day a new banknote series is put into circulation. The last time was in 1994. And being able to hold the launch here in the Lofoten islands is an added bonus. The sea and the Lofoten islands are inextricably linked – the sea is a defining feature of the landscape and a key source of food, employment and recreation. Norway’s coastline is embraced by the sea from the northernmost point to the southernmost tip. The sea has shaped our history and our economy, and from today onwards, it will also feature on Norwegian banknotes. Norges Bank has been governed by our elected representatives since 1816 under a clear mandate: to safeguard the monetary system and the value of our money. Norges Bank’s banknotes and coins are the community’s money, and our trust in the value of our banknotes is closely linked to our trust in each other. With this in mind, it was important to design banknotes that would tell a story about us as a community of people. As the sea is a key dimension in that story, it was chosen as the theme of the new banknote series.
I would agree that there are certainly some common features, and indeed we would usually review as part of our own work the work done by the audit department on identifying areas of potential risk and control problems. Similarly, external auditors’ observations and recommendations are often very useful to us in coming to a judgement on the effectiveness of an institution’s internal controls. However, to supervise an institution effectively a supervisor needs, in my opinion, a means of independently verifying that internal controls are sound and that all substantive risks have been identified and considered. For this reason, our ongoing dialogue with institutions, and our periodic on-site examinations of institutions’ activities, are invaluable. I believe this oversight can also be beneficial in a practical way to the institution itself. For example, we may have insights that the institution does not. We may be able to give an institution feedback on how it compares vis-à-vis its peers in similar areas and to indicate respects in which, from our experience, its controls and risk management processes are falling behind the game. I would not want to overplay this “management consultant” type role, but I think it can be beneficial, perhaps especially to the smaller, less sophisticated financial institutions. Of course, this presupposes that we have the necessary expertise to offer useful advice. This is a constant challenge in today’s environment of rapid technological change and product innovation.