Norway’s SWF now twice size of its economy

oslo — Norway’s government proposed improving oversight of its sovereign wealth fund after it has swelled to more than twice the size of the economy since it was set up two decades ago.

The government proposed that a new monetary policy committee be set up within the central bank so that the overall board could focus more on supervising the fund.

The government stopped short of moving the $1 trillion fund out of the central bank, which had been recommended by a commission earlier this year amid concerns over its growing complexity and size.

“Keeping the management of the fund in Norges Bank implies that the Bank will continue to have broad and complex responsibilities,” Finance Minister Siv Jensen said in a statement. “We must ensure that the governance structures are well adapted to these responsibilities.”

The giant fund, created from Norway’s oil wealth, straddles the world and owns about 1.4 per cent of global stocks. Its growing size also means it’s contributing a growing share to Norway’s annual budget — estimated at 17 per cent ex-oil next year — meaning its management is becoming more and more important in maintaining the country’s lavish welfare state.

The fund has struggled to meet return targets over the past years as interest rates slid to record lows. —