Present:

Executive Board:

Øystein Olsen, Jon Nicolaisen, Egil Matsen, Kjetil Storesletten, Karen Helene Ulltveit-Moe, Kathryn M. Baker (items 154-158 and 162), Steinar Juel and Kristine Ryssdal

Alternates:

Arne Hyttnes and Kristine Landmark

Employee representatives:

Kjersti-Gro Lindquist (items 159-163) and Robert Leirpoll (items 159-163)

Office of the Supervisory Council:

Management:

Ida Wolden Bache (items 154-156), Age Bakker (item 161), Henrik Borchgrevink (items 154-156), Olav Bø (item 160), Hege Gjerde (item 161), Trond Grande (item 161), Nina Hammerstad (item 162), Renate Haugen (item 161), Stephen Hirsch (item 161), Mie Holstad (item 162), Torbjørn Hægeland (items 154-157 and 162), Mads Kristensen (items 160-162), Per Espen Lilleås (items 154-156), Kyrre Nilsen (items 154-163), Ketil Rakkestad (items 154-156), Merethe Riddervold (item 161), Ingrid Solberg (items 154-156), Jan Thomsen (item 162), Ingunn Valvatne (items 160-162), Leif Veggum (item 157), Birger Vikøren (items 159-163), Sindre Weme (items 154-156), Steinar Årdal (item 160), Runar Malkenes (items 154-157), Arne Osnes (items 154-156), Andreas Andersen (item 157)

There were no comments on the meeting notice and agenda.

Item 154/2018 Response to interest rate decision and subsequent follow-up – monetary policy meeting of 15 August

Discussion document: Memo from Monetary Policy of 21 August 2018

Ida Wolden Bache presented the matter for discussion and the Executive Board took note of the matter.

Item 155/2018 Advice to the Ministry of Finance on the countercyclical capital buffer

Discussion document: STRICTLY CONFIDENTIAL memo of 6 September 2018

Torbjørn Hægeland and the Governor outlined the basis for the recommendation to the Ministry of Finance on the countercyclical capital buffer. The decision basis is to be published in Monetary Policy Report 3/18.

The Executive Board discussed the level of the countercyclical capital buffer for banks. In light of the Executive Board's discussions, a draft letter to the Ministry of Finance with a recommendation on the countercyclical capital buffer for the third quarter of 2018 is to be presented for final consideration at the Executive Board's meeting of 19 September.

Item 156/2018 Draft monetary policy report with financial stability assessment 3/18 – Monetary policy analysis and provisional assessments

Discussion document: STRICTLY CONFIDENTIAL memo of 6 September 2018

Ida Wolden Bache and the Governor presented the main elements of the draft monetary policy report, including the analyses and assessments of the economic situation and the outlook for monetary policy. They also referred to presentations and discussions at the seminar on the monetary policy situation.

The Executive Board discussed the economic outlook and the monetary policy stance. In light of the Executive Board's discussions and new information, a draft "Executive Board's Assessment" is to be presented for final consideration at the Executive Board's meeting of 19 September.

Item 157/2018 Withdrawal of Series VII 50-krone, 500-krone and 1000-krone banknotes

Discussion document: Memo from Financial Stability of 22 August 2018

With reference to section 15(1) of the Norges Bank Act, the Executive Board issued a regulation on the withdrawal of means of payment. Under the regulation. Series VII 50-krone and 500-krone banknotes will be removed from circulation and cease to be legal tender from 19 October 2019, while the Series VII1000-kronebanknotes will be removed form circulation and cease to be legal tender one year after Series VIII 1000-krone banknotes are put into circulation.

The Governor was authorised to set the launch date for the 1000-krone note in autumn 2019, and the date on which Series VII 1000-kronebanknotes will be withdrawn.

Item 158/2018 Briefing on relevant matters

The Governor and Deputy Governors gave a briefing on relevant matters.

Item 159/2018 Minutes of the Executive Board meeting of 15 August 2018

Discussion document: Draft minutes

The Executive Board approved the minutes of its meeting of 15 August.

Item 160/2018 Summary of audit report Norges Bank Central Banking Operations (NBCBO)

Discussion documents: Memo from Internal Audit of 5 September 2018
Memo from the Audit Committee of 3 September 2018

Mads Kristensen presented the main elements of the audit report
"NBCBO Management and control in the IT modernisation programme (DiffIT)".

Karen Helene Ulltveit-Moe reported on the Audit Committee's discussions and the issues of particular concern to the Committee, including the management of resources in the programme and access to the necessary expertise.

The Executive Board took note of Internal Audit's summary of the audit report.

Item 161/2018 Summary of audit reports Norges Bank Investment Management (NBIM)

Discussion documents: Memo from Internal Audit of 5 September 2018
Memo from the Audit Committee of 3 September 2018

Mads Kristensen presented the main elements of five audit reports:

• 1802 NBIM Information Barrier and Handling of Confidential Information
• 1803 NBIM ERM – Operational Risk Management
• 1805 NBIM ISAC project set-up and execution
• 1806 NBIM IT Security in the transition period
• 1807 NBIM Cost Management

Karen Helene Ulltveit-Moe reported on the Audit Committee's discussions and the issues of particular concern to the Committee, including the focus on cost-benefit analyses and processes related to procurement.

The Executive Board took note of Internal Audit's summary of the audit reports and management's response to the audits and noted management's account of the changed procurement practices.

Item 162/2018 Summary of audit reports Norges Bank Real Estate Management (NBREM)

Discussion documents: Memo from Internal Audit of 5 September 2018
Memo from the Audit Committee of 3 September 2018

Mads Kristensen presented the main elements of the audit reports:

• 1810 NBREM IT Implemented control over cloud-based IT services
• 1811 NBREM Cost Management

Karen Helene Ulltveit-Moe reported on the Audit Committee's discussions and the issues of particular concern to the Committee.

The Executive Board took note of Internal Audit's summary of the audit reports.

Item 163/2018 Any other business

Karen Helene Ulltveit-Moe gave a briefing on the appointment of members to the Audit Committee (see attachment).

The following were distributed for information together with discussion documents:

• National report from the Regional Network 3/2018

Memo from Monetary Policy of 6 September 2018
- Market Focus 3-2018
- Memo from Monetary Policy of 10 September 2018, Pengepolitikken kort fortalt [Monetary Policy in brief]
- Letter to the Ministry of Finance of 28 August 2018 – Rule for rebalancing the equity share in the GPFG
- Report from the Real Estate Investment Board meeting of 29 May
- Report from the Audit Committee of 13 August 2018
- Report from the Audit Committee of 31 August 2018