The government tried on several occasions in the first decade after WWII to turn Norges Bank into a subordinated agency. If the history of Norges Bank was written in a vacuum with no international references, one might have thought that this was unique for Norway. Not so, similar developments were observed in many countries who previously subscribed to the gold standard. Political control over central banks was tightened in many countries with one notable exception, the Bundesbank in West Germany which was established as the most independent central bank in the post-WWII period (Sejersted, 1994). 3 Norges Bank was in fact not as dependent as believed. The truth may lie somewhere in between. Recent research on the role of Norges Bank during the first decade after WWII (Ecklund, 2008) 4 suggests that Norges Bank maintained a relatively high degree of operational independence in this period. Norges Bank’s independence was gradually restored. In 1986 Norges Bank was granted instrument autonomy and started to set short-term interest rates to sustain the prevailing fixed exchange rate regime. The current inflation targeting regime was introduced in March 2001 and Norges Bank now sets short-term interest rates aimed at keeping inflation around 2.5% over time. Greater independence demands adequate accountability. Along with greater degree of autonomy and independence Norges Bank has become more open and transparent in its monetary policy communication. Increased openness by Norges Bank is not only a way of achieving accountability to its constituents, but is also instrumental to enhance policy effectiveness.
And, once it is recognized that there is only one central bank in each country, it is also clear that a strong international perspective on central bank history and monetary history is needed in order to trace the origin of ideas and how monetary policy views and practices have developed over time as well as across different countries. The key responsibilities of central banks are to promote price stability and financial stability. This fall, policy makers around the world have struggled to implement policy measures to bring the international financial markets back into a more normal mode of operation. In this pursuit we are constantly reminded of the importance of having a solid understanding of economic history and developments as a backdrop to designing the right policy for the current situation. This fall, international experts like you are in greater demand than ever to help bring about this level of understanding, and many of you appear frequently in debates on these issues in policy workshops and conferences as well as in the media. Against this backdrop we see this workshop as one of many arenas where policy makers and academic experts can exchange ideas and views on what has been characterized as the most serious financial crisis since the Great Depression in the 1930s. The escalation of the financial crisis on 15 September was a consequence of an abrupt loss of confidence and credibility in the financial markets.