Present:

Executive Board:

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

Alternates:

Arne Hyttnes and Kristine Landmark

Employee representatives:

Kjersti-Gro Lindquist and Mona H. Sørensen (items 193-202)

Supervisory Council:

Jan Frode Jakobsen (items 181, 183-185 and 194-201)

Deloitte:

Henrik Woxholt (items 183-185)

Management:

Ørjan Agdesteen (items 181, 185 and 198-201), Ragna Alstadheim (item 180), Henrik Andersen (item 180), Ida Wolden Bache (items 177-178), Ole Christian Bech-Moen (items 190-191), Henrik Borchgrevink (items 179-180), Olav Bø (items 177-178, 181 and 200), Lars Dahl (item 183), Monique Erard (item 180), Hege Gjerde (items 185, 193-194, 199 and 201), Trond Grande (items 183-199), Bjarne Gulbrandsen (items 178-202), Pål Haugerud (items 186-191), Jane Haugland (items 200-201), Stephen Hirsch (item 195), Mie Holstad (items 196-198), Dag Huse (item 181 and 184-191), Torbjørn Hægeland (items 177-180), Karsten Kallevig (items 183-185 and 196-198), Per Gunner Karlsen (item 181), Tord Krogh (item 180), Per Espen Lilleås (items 177-178), Lise Lindbäck (items 190-191), Runar Malkenes (items 177-180, 183-191 and 198), Nina Larsson Midthjell (items 177-180), Kyrre Nilsen (items 177-191 and 193-202), Roger Rake (item 181), Ketil Rakkestad (item 180), Merethe Riddervold (items 184, 193-195, 198-199 and 201), Ingrid Solberg (items 177-178), Yngve Slyngstad (items 183-199), Carine Smith-Ihenacho (items 186-191), Haakon Solheim (item 180), Elise Vik Sætre (item 180), Ylva Søvik (item 180), Jan Thomsen (items 196-197), Ingunn Valvatne (items 181, 183-185, 190-191 and 193-201), John Tore Vatnar (items 186-189), Birger Vikøren (items 181-192 and 198-202), Hanna Winje (item 179), Steinar Årdal (item 200)

There were no comments on the meeting notice and agenda.

Item 177/2018 Response to Monetary Policy Report and interest rate decision – Monetary policy meeting of 19 September 2018

Discussion document: Memo from Monetary Policy of 27 September 2018

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

Item 178/2018 The current monetary policy situation

Discussion document:

a. Recommendation for Norges Bank's policy rate – Executive Board's meeting of 24 October 2018
STRICTLY CONFIDENTIAL memo from Monetary Policy of 23 October 2018

b. The Executive Board's assessment and information on developments since the September 2018 Monetary Policy Report
STRICTLY CONFIDENTIAL memo from Monetary Policy of 19 October 2018

c. Report from the meeting between Norges Bank and the Ministry of Finance of 18 September 2018

d. Presentations from Monetary Policy dated 24 October 2018

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

Against this background, the Executive Board discussed the matter. The Executive Board's assessment is that the outlook and balance of risks imply a gradual increase in the policy rate. Economic growth has been a little lower and inflation somewhat higher than projected, but the outlook and the balance of risks do not appear to have changed substantially since the September 2018 Monetary Policy Report.

The Executive Board decided to keep the policy rate unchanged at 0.75 percent. The decision was unanimous.

Item 179/2018 Consultation on draft regulation on prudent consumer lending practices

Discussion document: Memo from Financial Stability of 17 October 2018

Torbjørn Hægeland presented the matter for discussion.

The Executive Board discussed the matter and approved the submission of a consultation response to the Ministry of Finance. The Governor was authorised to finalise the document based on the discussions at the meeting.

Item 180/2018 Financial Stability Report for 2018

Discussion document: Memo from Financial Stability of 17 October 2018

Torbjørn Hægeland and Henrik Andersen presented the main elements of the report. Reference was also made to presentations and discussions at the Executive Board's seminar on 19 September.

Against this background, the Executive Board discussed the matter. The Executive Board approved the proposed "Executive Board's assessment" subject to the remarks made during the meeting, and took note of the descriptive part of the 2018 Financial Stability Report. The report is to be published on 29 October 2018.

Item 181/2018 Financial risk and management of the foreign exchange reserves 2018 Q3

Discussion documents: Memo from Markets and ICT of 18 October 2018
Memo from the Risk and Investment Committee of 23 October 2018
Memo from the Audit Committee of 20 October 2018

Olav Bø presented the main elements of the report.

Karen Helene Ulltveit-Moe and Egil Matsen presented the discussions on the Audit, and Risk and Investment committees respectively, and the issues of particular concern to the committees, including the rebalancing at the end of the quarter. 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 2018 Q3. A public version of the report is to be published on Norges Bank's website on 2 November 2018.

Item 182/2018 Briefing on current issues in Norges Bank Central Banking Operations (NBCBO)

The Governor gave a briefing on relevant matters in NBCBO.

Item 183/2018 Norges Bank Real Estate Management (NBREM) Performance and Risk 2018 Q3

Discussion documents: Memo from NBREM of 12 October 2018
Memo from the Risk and Investment Committee of 23 October 2018

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 the sales of certain properties. The Committee recommended that the Executive Board follows management's guidance.

The Executive Board took note of NBREM's report on return and risk for unlisted real estate management for 2018 Q3.

Item 184/2018 Norges Bank Investment Management (NBIM) return and risk 2018 Q3

Discussion documents: Memo from NBIM of 18 October 2018
Memo from the Risk and Investment Committee of 23 October 2018

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, including a review of the contributions to relative return. The Committee recommended that the Executive Board follows management's guidance.

The Executive Board took note of NBIM's report on return and risk for 2018 Q3.

Item 185/2018 Government Pension Fund Global (GPFG) – Public report for 2018 Q3

Discussion documents: Memo from NBIM of 18 October 2018
Memo from the Audit Committee of 20 October 2018

Yngve Slyngstad 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. The Committee recommended that the Executive Board follows management's guidance.

Henrik Woxholt confirmed that nothing had come to Deloitte's attention during its review leading it to believe that the interim financial reporting had not in all material respects been prepared in accordance with relevant accounting standards.

The Executive Board approved the public report on the management of the GPFG, including the interim financial reporting for the investment portfolio for 2018 Q3. The Executive Board asked NBIM to conduct a review of equities lending in the light of questions raised regarding withholding tax refund procedures in some markets.

Item 186/2018 Recommendation from the Council on Ethics of 5 June 2018

Discussion document: Memo from the Ownership Committee of 17 October 2018

Norges Bank has received a recommendation of 5 June 2018 from the Council on Ethics on the exclusion of the company Texwinca Holdings Ltd. The recommendation is based on the risk that the company is responsible for serious or systematic human rights violations such as murder, torture, deprivation of liberty, forced labour and the worst forms of child labour (cf the conduct-based criterion in Section 3(1) (a) of Guidelines for Observation and Exclusion from the Government Pension Fund Global).

Egil Matsen reported on the Ownership Committee's discussions and the Committee's position.

The Executive Board endorsed the Ownership Committee's position:

• Texwinca Holdings Ltd is to be excluded from the GPFG's portfolio.
• The Ministry of Finance is to be informed of the decision.
• The exclusion is to enter into force on 1 January 2019. The Governor is authorised to grant exemptions from the deadline in situations with challenging liquidity or other special situations. The Governor is authorised to set a date for publishing the decision.

Item 187/2018 Recommendations from the Council on Ethics of 30 May 2017, 29 June 2017 and 15 March 2018

Discussion documents: Memo from NBIM of 18 October 2018
Memo from the Ownership Committee of 18 October 2018

Norges Bank has received recommendations of 30 May 2017, 29 June 2017 and 15 March 2018 from the Council on Ethics on [redacted text]

Egil Matsen reported on the Ownership Committee's discussions and the Committee's position.

The Executive Board endorsed the Ownership Committee's position:

• The Executive Board is to consider the Council on Ethics' recommendations for specific matters.
• Different understandings as to the application of the criterion nevertheless suggest that decisions on the exclusion of specific companies are not to be made now. Instead, the Executive Board decided to submit a letter to the Ministry of Finance, in line with the attached draft, with the aim of clarifying how the criterion is to be understood.
• The Governor is to be authorised to finalise the letter based on the Executive Board's discussion.
• The Executive Board is to later provide final consideration of specific matters after the Ministry has responded to the Bank's letter.

Item 188/2018 Recommendation on exclusion of companies – Product-based coal criterion

Discussion documents: Memo from NBIM of 3 October 2018
Memo from the Ownership Committee of 17 October 2018

In the guidelines for observation and exclusion from the GPFG, a product-based coal criterion was introduced as from 1 February 2016. Since 2016, Norges Bank has excluded 71 companies and placed 15 companies under observation based on the criterion. As part of the Bank's work to apply the criterion, recommendations are now presented on the exclusion of two companies.

Egil Matsen reported on the Ownership Committee's discussions and the Committee's position.

The Executive Board endorsed the Ownership Committee's position:

• The companies Evergy Inc and Washington H. Soul Pattison & Co Ltd are to be excluded from the GPFG's portfolio.
• The Ministry of Finance is to be informed of the decision.
• The exclusions enter into force on 1 January 2019. The Governor is authorised to grant exemptions from the deadline in situations with challenging liquidity or other special situations. The Governor is authorised to set a date for publishing the decision and the decision basis.
• The Executive Board is to be informed when the date for publication is set.

Item 189/2018 GPFG – Coal criterion and gambling companies

Discussion document: Memo from NBIM of 18 October 2018

In its letter of 28 June 2018, the Ministry of Finance asks Norges Bank to describe its work on assessing the observation and exclusion of companies under the coal criterion. The Bank is also asked to describe the extent of coal-related operations at companies excluded or placed under observation under this criterion and, as far as is possible, at other companies in the fund. Finally, the Bank is asked to report on the extent of gambling companies in the fund's benchmark index and describe their operations, including differences between the companies.

Yngve Slyngstad presented the draft response.

The Executive Board discussed the matter and approved the submission of a letter to the Ministry of Finance concerning the coal criterion and gambling companies in line with the attached draft. The Governor was authorised to finalise the letter based on the Executive Board's feedback at the meeting.

Item 190/2018 GPFG – Unlisted renewable energy infrastructure

Discussion documents: Memo from NBIM of 18 October 2018
Memo from the Risk and Investment Committee of 17 October 2018

In Recommendation 370 S (2017-2018), the Standing Committee on Finance and Economic Affairs requests the Ministry of Finance to "provide the Storting, no later than in next year's white paper, with concrete proposals for a mandate for investments in unlisted renewable energy infrastructure under the environment-related mandate, with the same transparency, risk and return requirements as for other investments." The Ministry followed this up in its letter to Norges Bank of 22 June, and at the same time requests that the Bank provide an account of its experience with the environment-related mandates (cf item 191/2018).

Yngve Slyngstad presented the matter for discussion.

The Executive Board discussed the matter and approved the request for a letter to be sent to the Ministry of Finance concerning investments in unlisted renewable energy infrastructure in the Government Pension Fund Global. The Governor was authorised to finalise the letter based on the Executive Board's feedback at the meeting.

Item 191/2018 GPFG – Environment-related investment mandates

Discussion documents: Memo from NBIM of 18 October 2018
Memo from the Risk and Investment Committee of 17 October 2018

Yngve Slyngstad presented the matter for discussion.

The Executive Board discussed the matter and approved the request for a letter to be sent to the Ministry of Finance concerning the environment-related mandates in line with the attached draft. The Governor was authorised to finalise the letter based on the Executive Board's feedback at the meeting.

Item 192/2018 Briefing on relevant matters for NBIM

Yngve Slyngstad gave a briefing on relevant matters for NBIM.

Item 193/2018 Minutes of the Executive Board meeting of 19 September 2018

Discussion document: Draft minutes

The Executive Board approved the minutes of its meeting of 19 September 2018.

Item 194/2018 NBIM operations report 2018 Q3

Discussion document: Memo from NBIM of 18 October 2018

Trond Grande presented the main elements of the report.

The Executive Board took note of NBIM operations report 2018 Q3.

Item 195/2018 NBIM compliance and control 2018 Q3

Discussion documents: Memo from NBIM of 18 October 2018
Memo from the Audit Committee of 22 October 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 the effects of guaranteeing the availability of securities for lending. 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 2018 Q3.

Item 196/2018 NBREM operations report 2018 Q3

Discussion document: Memo from NBREM of 12 October 2018

Mie Holstad presented the main elements of the report.

The Executive Board took note of the operations report for unlisted real estate management for 2018 Q3.

Item 197/2018 NBREM compliance and control 2018 Q3

Discussion documents: Memo from NBREM of 12 October 2018
Memo from the Audit Committee of 22 October 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 status of plans for the relocation of NBIM S.à.r.l. The Committee recommended that the Executive Board follows management's guidance.

The Executive Board took note of the report on compliance and control for unlisted real estate management for 2018 Q3.

Item 198/2018 Proposed 2019 budget for the management of the unlisted real estate portfolio

Discussion document: Memo from NBREM of 18 October 2018

Karsten Kallevig presented the budget proposal.

The Executive Board discussed the matter and approved the proposed budgeted operating expenses for the management of the unlisted real estate portfolio in 2019. The final proposed 2019 budget for the management of unlisted real estate is to be presented to the Executive Board for approval at the meeting of 21 November 2018.

Item 199/2018 Investment management – Budget for 2019

Discussion document: Memo from NBIM of 19 October 2018

Trond Grande presented the matter for discussion.

The Executive Board discussed the matter and approved the submission of a letter to the Ministry of Finance with a proposed limit for management costs for the GPFG in 2019 in line with the attached draft. The Governor was authorised to finalise the letter based on the Executive Board's feedback at the meeting.

The final proposed 2019 budget for investment management is to be presented to the Executive Board for approval at the meeting of 21 November 2018.

Item 200/2018 Budget for NBCBO for 2019 – DiffIT status

Discussion document: Memo from Markets and ICT of 19 October 2018

Olav Bø and Steinar Årdal referred to an earlier presentation (item 175/2018 at the meeting of 19 September) and presented updated cost estimates with uncertainty and risk and vulnerability analyses for the Differentiated IT portfolio (DiffIT) project in NBCBO.

The Executive Board discussed the matter, approved the execution of "DiffIT" project out in line with the discussion document and took note of the cost limit for the period 2019-2021. The Executive Board will revisit the costs for 2019 in connection with the consideration of the NBCBO budget on 21 November 2018.

Item 201/2018 Status of Norges Bank's budget for 2019

Discussion document: Memo from Corporate and Shared Services of 19 October 2018

Ørjan Agdesteen presented the matter for discussion.

The Executive Board took note of the status of Norges Bank's budget for 2019. The final proposed 2019 budget for Norges Bank is to be presented to the Executive Board for approval at the meeting of 21 November 2018.

Item 202/2018 Any other business

The Governor gave a briefing on Report No. 7 on a new central bank act and the processes ahead, including the commencement of work to improve the implementation of the changes.

The following were distributed for information together with the discussion documents:

• Agenda for the Executive Board seminar of 23 October 2018 on investment management
  Memo from NBIM of 15 October 2018
• Briefing on Brexit
  Memo from NBIM of 18 October 2018
• Report No. 7 to the Storting (2018-2019): on a new central bank act
• Letter to the Ministry of Finance of 26 June 2018 – Consultation NOU (Official Norwegian Reports) 2018:7 new act on official statistics and Statistics Norway
• Letter to the Ministry of Defence of 1 October 2018 – Consultation response on regulations for a new security act
• Minutes of the Ownership Committee meeting of 26 January 2018
• Minutes of the Ownership Committee meeting of 18 April 2018
• Minutes of the Remuneration Committee meeting of 6 February 2018
• Minutes of the Remuneration Committee meeting of 24 April 2018
• Minutes of the Remuneration Committee meeting of 20 June 2018
• Minutes of the Risk and Investment Committee meeting of 23 April 2018
• Real estate management – Report from meetings of the Real Estate Investment Board