Øystein Olsen: Guardian of the monetary system Speech by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), at the official event to mark the bicentenary of Norges Bank, Trondheim, 14 June 2016. *  *  *  Your Majesty, President of the Storting, Minister and honoured guests, Exactly two hundred years ago today, the Act relating to the monetary system of Norway was signed into law by King Karl II of Norway. The Act was an important step in the restoration of Norway as an independent nation. Two years earlier – at Eidsvoll – Christian Magnus Falsen, a key member of the 1814 Constituent Assembly, had asserted that no state can exist without a well-functioning monetary system. A national currency would be a symbol of Norway’s sovereignty and freedom. And to secure independence, the country’s economy had to be brought into order. With a monetary system in ruins, this was no easy task. Norway’s governing men – and no doubt Norway’s women too – had long been aware that a country without its own bank was at a disadvantage. It was a long way to Copenhagen, where the nearest bank was located. With no easy access to a bank, people had to rely on friends and relatives or business acquaintances instead. Theatres were not only places of entertainment, but important meeting places where deals could be struck and money exchanged. And if the theatregoer was lucky, he might go home with a loan in his pocket.
International organizations, among which the Financial Stability Board, and Standard Setting Bodies have played a very important role in gathering and disseminating information, as well as ensuring adequate coordination among major public authorities. I would also point out that monetary policy has not been the only tool we have used to increase resilience and defuse the shock. Different authorities have worked hand in hand, under a lot of time pressure, including financial regulators and supervisors, to deliver a very comprehensive and largely consistent set of measures to maintain the core functions of the financial system in these unprecedented events. Comprehensiveness and consistency have been key elements in our collective ability to foster resilience. So the test regarding coordination in crisis time has been passed rather well so far. However, it’s not over yet and good coordination should be maintained for the exit phase of support measures, generally speaking. In the field of financial regulation and supervision, there were variations in approaches, see for instance the leverage ratio for credit institutions, which was okay for the duration of the crisis, but led to divergence in the implementation of standards that should not last. Getting out of the crisis and unwinding support measures will require  further coordination and an adequate timing, in order to avoid possible cliff-effects and to address level playing field concerns. Regarding the prevention of crisis, I would be more prudent because, from my perspective, the jury is still out in terms of appropriate coordination across regulators and supervisors.