19  Hermod Skånland writes about the need to hold someone accountable for the hardships of the 1920s: “The government is usually a good target for criticism, but there is little appeal in firing shots at a government that is no longer in office, and through the 1920s there had been so many governments that no single government stood out as more responsible than others. On the other hand, there had been one central bank governor, who had also been a prominent figure. Nicolai Rygg became the obvious scapegoat, open to attack from both the masses and from historians, without any economists springing to his defence. Thus, the myth became established that the economic difficulties of the 1920s were due to parity policy, and that Nicolai Rygg was responsible for them. From there, it was only a short step to a general scepticism towards monetary policy combined with a more specific distrust of central banks and central bank governors.” Hermod Skånland (1998): “Mytedannelsen om paripolitikken” (Myth-making about parity policy), Aftenposten 30 May. BIS Review 154/2010  5  virtually solely responsible – for a policy that became a crucial deterrent to central bank independence for generations of economists and politicians – myself included.” 20 The postwar period of coordination and regulatory optimism Views on economic policy changed considerably from the end of the 1930s. The Bretton Woods system of fixed exchange rates against the US dollar was established, with the US dollar pegged to gold.
However, Norges Bank’s tasks have otherwise varied over time. We manage the Norwegian oil fund, which was a natural step in light of Norges Bank’s management of foreign exchange reserves. The fund will not, however, be one of the topics of my speech today. 3 The origins of Norges Bank Norges Bank was established in 1816 as a limited liability company, privately owned but under the control of the Storting. It was Norway’s first bank. The Napoleonic Wars had been costly for Denmark and eventually led to hyperinflation. In order to secure confidence in the new specie daler, Norges Bank had to be independent. 4 The intention was to make it difficult  2  A. Cukierman (2008), “Central Bank Independence and Monetary Policymaking Institutions – Past, Present and Future”, European Journal of Political Economy, 24 pp 722–36. 3  For a discussion of the Government Pension Fund Global, see Gjedrem (2010): “Perspectives on managing the Government Pension Fund Global”, lecture at the Norwegian Polytechnic Society, 2 November 2010. 4  See also Carsten Smith (1980):”Bankrett og statsstyre” [Banking law and public governance], p. 39: “Det klassiske system internasjonalt sett har vært å knytte penge- og kredittpolitikken til en selvstendig stillet sentralbank [The classic system internationally has been to assign monetary and credit policy to an independent central bank].” Universitetsforlaget. 2  BIS Review 154/2010  for the government and the Storting to influence the central bank. The Bank’s headquarters were located in Trondheim, a 12-day journey from the capital.