Present:

Executive Board:

Øystein Olsen, Jon Nicolaisen (items 5-19), Egil Matsen, Kjetil Storesletten, Karen Helene Ulltveit-Moe, Kathryn M. Baker, Steinar Juel and Kristine Ryssdal

Alternates:

Arne Hyttnes and Kristine Landmark

Employee representatives:

Mona H. Sørensen and Nina Larsson Midthjell (15-25)

Office of the Supervisory Council:

Jan Frode Jakobsen (8, 10-12, 15-24)

Management:

Ida Wolden Bache (5), Per Espen Lilleås (5), Ingrid Solberg (5), Torbjørn Hægeland (5-7), Olav Bø (5, 8), Marius Hagen (5), Knut Sandal (6-7), Sigrid Igland (6-7), Andreas Andersen (5-7), Pål Haugerud (8, 10-13, 15-20), Roger Rake (8), Arne Osnes (8), Yngve Slyngstad (10-19), Trond Grande (10-21), Dag Huse (10-13), Karsten Kallevig (11, 15, 18-19), Lars Dahl (11, 15, 18-19), Mie Holstad (11, 15, 18-19), Hege Gjerde (16), Stephen Hirsch (17), Jan Thomsen (19), Merethe Riddervold (10, 12-13, 16-17, 20-21), Ørjan Agdesteen (8, 20), Runar Malkenes (8, 10-13, 15-21), Line Vogt (20), Mads Kristensen (8, 10-12, 15-24), Kathrine Stang Ottesen (24), Ingunn Valvatne (5-25), Bjarne Gulbrandsen (5-25)

There were no comments on the meeting notice and agenda.

Item 5/2018 The current monetary policy situation

Discussion documents:

• Recommendation for Norges Bank's key policy rate – Executive Board meeting of 24 January 2018, STRICTLY CONFIDENTIAL memo from Monetary Policy of 24 January 2018
• The Executive Board's assessment and information on developments since Monetary Policy Report 4/17, STRICTLY CONFIDENTIAL memo from Monetary Policy of 19 January 2018
• Report from the meeting between Norges Bank and the Ministry of Finance of 12 December 2017
• Presentations from Monetary Policy, STRICTLY CONFIDENTIAL presentation distributed at meeting

Ida Wolden Bache outlined the main economic developments since the previous Monetary Policy Report and the assessment of developments in relation to defined monetary policy strategy. The Governor outlined management's recommendation.

Against this background, the Executive Board had an exchange of views. The Executive Board's assessment is that the upturn in the Norwegian economy appears to be continuing, broadly in line with the picture presented in the December Report. Inflation is low, but has moved up as expected. Overall, the outlook and the balance of risks do not appear to have changed substantially since the December Report.

The Executive Board decided to keep the key policy rate unchanged at 0.5%. The decision was unanimous.

Item 6/2018 The report "Financial Infrastructure 2018" – proposed themes

Discussion document:

• Memo from Financial Stability of 18 January 2018

Torbjørn Hægeland presented the proposed themes for the report, for consideration by Executive Board on 2 May 2018.

The Executive Board had an exchange of views and approved the proposed themes being explored in the work on the report "Financial Infrastructure 2018".

Item 7/2018 Briefing on central bank digital currency project

Discussion document:

• Memo from Financial Stability of 19 January 2018

Torbjørn Hægeland presented the purpose of the project and the project framework.

The Executive Board discussed the matter and took note of information on the central bank digital currency project.

Item 8/2018 Financial risk and management of the foreign exchange reserves 2017 Q4

Discussion documents:

• Memo from Markets and ICT of 19 January 2018
• Memo from the Audit Committee of 23 January 2018
• Memo from the Risk and Investment Committee of 23 January 2018

Olav Bø presented the main elements of the report.

Karen Helene Ulltveit-Moe and Egil Matsen reported on the Audit, and Risk and Investment Committees' discussions, and the issues of particular concern to the committees, including on experience of the transfer of the management of the long-term fixed income portfolio to Central Banking Operations. The committees recommended that the Executive Board follows management's guidance.

The Executive Board took note of the report on financial risk and management of the foreign exchange reserves for 2017 Q4. A public version of the report is to be published on Norges Bank's website on 27 February.

Item 9/2018 Briefing on relevant matters for Central Banking Operations

The Governor gave a briefing on relevant matters for Norges Bank Central Banking Operations.

Item 10/2018 NBIM Return and Risk, 2017 Q4

Discussion documents:

• Memo from NBIM of 18 January 2018
• Memo from the Risk and Investment Committee of 23 January 2018

Yngve Slyngstad and Dag Huse presented the main elements of the report.

Egil Matsen reported on the Risk and Investment Committee's discussions and the issues of particular concern to the Committee. The Committee noted that management has shown very strong results for a long period, including Q4. The committee recommended that the Executive Board follows management's guidance.

The Executive Board took note of the report on return and risk for the fourth quarter of 2017.

Item 11/2018 NBREM Return and Risk, 2017 Q4

Discussion documents:

• Memo from NBREM of 16 January 2018
• Memo from the Risk and Investment Committee of 23 January 2018

Karsten Kallevig and Lars Dahl presented the main elements of the report.

Egil Matsen reported on the Risk and Investment Committee's discussions and the issues of particular concern to the Committee, including developments in certain cities, solid results in Q4 and in 2017 as a whole, and the outlook ahead. The Committee recommended that the Executive Board follow management's guidance.

The Executive Board took note of the report on return and risk for unlisted real estate management for Q4 2017.

Item 12/2018 GPFG – Expectations document on tax and transparency

Discussion document:

• Memo from NBIM of 19 January 2018

In spring 2017, NBIM published an expectations document on tax and transparency. The document expresses how NBIM, which is a financial investor, expects that the tax behaviour of multinational companies to be appropriate, prudent and transparent. The Ministry of Finance has asked for a report on the work of following up the expectations document.

Yngve Slyngstad presented the draft letter to the Ministry of Finance concerning NBIMs follow-up work.

The Executive Board noted that the letter is to be finalised and sent to the Ministry of Finance by the deadline of 1 February 2018.

Item 13/2018 "The Executive Board's assessment of the results" in the annual report on the GPFG for 2017

Discussion document:

• Memo from the General Secretariat of 18 January 2018

Section 6-2 of the management mandate for the GPFG states that annual reporting shall contain the Executive Board's assessment of performance, including the performance of different investment strategies for management of equity and fixed-income investments. As in 2017, the Executive Board's assessments will be included in the annual report on the management of the GPFG.

Ingunn Valvatne presented the matter for discussion.

The Executive Board discussed the matter and asked management to continue working on the draft in line with feedback and comments from the meeting. A revised version will be presented to the Executive Board at its meeting on 7 February 2018.

Item 14/2018 Briefing on relevant matters for Norges Bank Investment Management

Yngve Slyngstad gave a briefing on relevant matters for Norges Bank Investment Management.

Item 15/2018 Minutes of the Executive Board meetings of 13 December 2017 and 5 January 2018

Discussion document:

• Draft minutes

The Executive Board approved the minutes of its meetings of 13 December 2017 and 5 January 2018.

Item 16/2018 NBIM – operations report 2017 Q4

Discussion document:

• Memo from NBIM of 18 January 2018

Trond Grande presented the main elements of the report.

The Executive Board took note of the operations report for NBIM for the fourth quarter of 2017.

Item 17/2018 NBIM compliance and control – Report for the fourth quarter of 2017

Discussion documents:

• Memo from NBIM of 18 January 2018
• Memo from the Audit Committee of 23 January 2018

Stephen Hirsch presented the main elements of the report.

Karen Helene Ulltveit-Moe reported on the Audit Committee's discussions and the issues of particular concern to the Committee, including events in the quarter and the extent of NBIM's adaptations to the MiFID II directive. The Committee recommended that the Executive Board follows management's guidance.

The Executive Board took note of the report on compliance and control at NBIM for the fourth quarter of 2017.

Item 18/2018 NBREM operations report 2017 Q4

Discussion document:

• Memo from NBREM of 12 January 2018

Karsten Kallevig and Mie Holstad presented the main elements of the report.

The Executive Board took note of the operations report for unlisted real estate management for the fourth quarter of 2017.

Item 19/2018 NBREM compliance and control 2017 Q4

Discussion documents:

• Memo from NBREM of 12 January 2018
• Memo from the Audit Committee of 23 January 2018

Jan Thomsen presented the main elements of the report.

Karen Helene Ulltveit-Moe reported on the Audit Committee's discussions and the issues of particular concern to the Committee, including the risk associated with staffing and the ability to attract and retain talented employees. The Committee recommended that the Executive Board follow management's guidance.

The Executive Board took note of the report on compliance and control for unlisted real estate management for the fourth quarter of 2017.

Item 20/2018 Norges Bank – Annual report of the Executive Board for 2017

Discussion document:

• Memo from the General Secretariat of 18 January 2018

Runar Malkenes presented the draft of the Executive Board's annual report for 2017 and the discussion on corporate social responsibility.

The Executive Board discussed the formulation of its annual report for 2017 and the discussion of corporate social responsibility, and made remarks on content and text.

The Executive Board's annual report is to be presented for final consideration at the Executive Board meeting of 7 February, as part of Norges Bank's Annual Report. Norges Bank's annual reports for 2017 are to be published on 27 February 2018.

Item 21/2018 The Supervisory Council's supervision plan for 2018

Discussion document:

• Memo from the General Secretariat of 18 January 2018, with appended supervision plan for 2018 approved in the Supervisory Council's meeting of 14 December 2017

Jan Frode Jakobsen presented the supervision plan and the supervisory activities that are planned to be carried out in 2018.

The Executive Board discussed the matter and took note of the Supervisory Council's supervisory plan for 2018.

Item 22/2018 The Executive Board's long-term plan for Internal Audit for 2018-2021

Discussion documents:

• Memo from Internal Audit of 17 January 2018
• Memo from the Audit Committee of 16 January 2018

Mads Kristensen presented the main elements of the long-term plan. Kathryn Baker reported on the Audit Committee's discussions and the issues of particular concern to the Committee. The Committee recommended that the Executive Board follows Internal Audit's guidance.

The Executive Board approved Internal Audit's proposed long-term plan for 2018-2021.

Item 23/2018 The Executive Board's annual plan for Internal Audit for 2018

Discussion documents:

• Memo from Internal Audit of 17 January 2018
• Memo from the Audit Committee of 16 January 2018

Mads Kristensen presented the main elements of the annual plan for 2018. Kathryn Baker reported on the Audit Committee's discussions and the issues of particular concern to the Committee. The Committee recommended that the Executive Board follows Internal Audit's guidance.

The Executive Board approved Internal Audit's proposed audit plan for 2018.

Item 24/2018 Operational risk and compliance in Central Banking Operations 2017 H2

Discussion documents:

• CONFIDENTIAL Memo from Governance, Risk and Compliance of 18 January 2018
• Memo from the Audit Committee of 23 January 2018

Kathrine Stang Ottesen presented the main elements of the report. Karen Helene Ulltveit-Moe reported on the Audit Committee's discussions and the issues of particular concern to the Committee, including events in the quarter and risks and measures related to cyber security. The Committee recommended that the Executive Board follows management's guidance.

The Executive Board took note of the report on operational risk and compliance in Central Banking Operations for the second half of 2017.

Item 25/2018 Any other business

There was no other business.

The following were distributed for information together with discussion documents:

• Report from Associate Professor Trond Døskeland and Professor Per Strömberg on unlisted equity investments in the GPFG.
• Report from Professor Magnus Dahlquist and Professor Bernt Arne Ødegaard on Norges Bank's management of the GPFG.
• Report on the global practice of responsible investment from the consulting firm Inflection Point Capital Management.
• Letter to the Ministry of Finance of 13 December 2017 – Benchmark index for the GPFG
• Letter to the Ministry of Finance of 14 December 2017 – Bonds in the Government Pension Fund Global
• Letter to the Ministry of Finance of 15 December 2017 – Review of Norges Bank's management of the GPFG
• Letter to the Ministry of Finance of 18 December 2017 – NBIM CEO Investment Mandate
• Letter to the Ministry of Finance of 19 December 2017 – NOU 2017:13 New Central Bank Act – Tax risk and the costs of a potential reorganisation of the Government Pension Fund Global.
• NBIM Monthly Board Report – November 2017
• Programme for the Executive Board's seminar on 23 January 2018