Norway has invested NOK 12,000 billion in an uncertain and dangerous world. That is why the head of NATO will be the new central bank governor.
– The Governor is the top manager of a complex business with many good professionals.
This was the first thing Minister of Finance Trygve Slagsvold Vedum (Sp) said at the press conference on Friday after he had mentioned Jens Stoltenberg as the new central bank governor.
Norges Bank is “complex” because it will both set interest rates in Norway and manage the world’s largest fund of its kind. With NOK 12,000 billion under management, the Petroleum Fund is a giant in the international financial markets.
The third main task for Norges Bank is to ensure that the banks and the rest of the financial system function well.
Former central bank governor and finance councilor Svein Gjedrem chaired the committee that studied the new central bank law. The committee proposed splitting Norges Bank in two by removing the Oil Fund from the bank.
The Ministry and the Storting turned their thumbs down for the proposal.
– The Petroleum Fund and asset management make up an ever-increasing part of Norges Bank’s operations. Therefore, solid management experience, broad insight into international development and the ability to promote good, professional decision-making bases are crucial, Vedum said.
Dark clouds for the Oil Fund
If Gjedrem’s proposal for division had been adopted, Norges Bank would have been smaller and simpler.
The fund, for its part, has become much larger and much more important for Norway.
– There are a lot of dark clouds in the world. When Øystein Olsen was hired as central bank governor, the fund was worth around NOK 3,000 billion. It is now NOK 12,000 billion. So that part of the central bank’s activities has become much more important, says Vedum to Aftenposten / E24.
Vedum says that “unfortunately there are a few undulating international conditions”.
These worked on the hiring
A separate group in the Ministry of Finance has been working on the appointment for a long time. It has been chaired by Finance Councilor Hans Henrik Scheel. The finance department, which is responsible for economic policy, has not been part of the group.
The leaders of the department responsible for the financial market and the department responsible for the Petroleum Fund have participated in the group.
The oil fund’s well-being has been at the forefront of the process.
Crises and security policy in
I the royal resolution Vedum continues to spin on the complexity of Norges Bank. The resolution is the document that is presented to the King in Council at the Palace.
In the resolution, he starts the assessment of Stoltenberg as follows:
“Stoltenberg has extensive top management experience from complex organizations, and is considered to have very good leadership skills and very good communication skills.”
The ability to handle crises has been given a role in the management of Norges Bank: “Stoltenberg has extensive experience of handling demanding situations, including crises.”
Vedum said at the press conference that the goal for the fund is that it should provide the greatest possible return over time and be managed in a safe and good way.
– Therefore, we have also been concerned with having a secure chairman of the board for the fund who has a good understanding of society, a broad understanding of society and good insight also into security policy issues. We believe that this background is a strength, said Vedum, reproduced in E24.
The other candidate
Ida Wolden Bache was the other candidate for the job. She has a doctorate in economics and extensive experience from senior positions at Norges Bank. She has headed both the department that assesses the key policy rate and the department that looks after the banks.
That was not enough.
Regarding Stoltenberg’s experience within the bank’s three main tasks, the royal resolution states: “Stoltenberg does not have operational work experience from central bank operations or asset management.”
Nevertheless, he has expertise that Vedum considers sufficient: “He nevertheless has a good understanding of the economy, including monetary and fiscal policy, and the interplay between these, as well as international developments that may be important for these policy areas.”
Encouraged more to apply
As far as Aftenposten / E24 is aware, the Ministry of Finance has encouraged several candidates to apply for the job. The question is roughly: “Do you want to apply and be part of the assessment?”
Only two of the invited applicants, namely Stoltenberg and Bache. Only these two have been interviewed about the job. Stoltenberg was interviewed both in Oslo and on screen from Brussels. Through several rounds, personal and professional qualifications are assessed. It can not attach anything to the person who is to have the job.
Already in the announcement text “management experience from complex organizations” comes in. It is also necessary to be able to handle “crises and emergency situations”.
Announcement as project
Only the work with the announcement text has almost been a separate project. The headhunting company Backer Scheie has had talks with Norges Bank’s executive board and the top three teams with managers at Norges Bank. The leader and deputy leader of the Petroleum Fund have also provided input.
The head of Norges Bank’s supervisory board has also been in talks with the headhunting company. The Supervisory Board is the Storting’s control body.
The result was a call text where the competence requirement is turned in the direction of management experience and understanding of international conditions. The Governor will lead around 1,000 employees spread across the globe.