Jan F Qvigstad: On transparency
Speech by Mr Jan F Qvigstad, Deputy Governor of Norges Bank (Central Bank of Norway),
at Det Norske Videnskaps-Akademi (The Norwegian Academy of Science and Letters), Oslo,
10 November 2009.
Ida Wolden Bache, Amund Holmsen, Marie Norum Lerbak and Øistein Røisland provided valuable assistance in
preparing this speech
* * *
Introduction
Norges Bank's Executive Board has decided that the key policy rate now should be 1.5 per
cent. If economic developments are broadly in line with projections, the appropriate key
policy rate will be 2.75 per cent around the end of next year.
If I had made this statement ten years ago, it would have constituted a breach of
confidentiality.1 Norges Bank considered this to be highly sensitive information. Had I been
deputy chairman of the US Federal Reserve Board twenty years ago, I would not even have
been entitled to reveal the latest interest rate decision.2 Today, this sounds rather odd.
Transparency is now taken for granted among central banks and in other areas of society.
In London in 1780, the Bank of England was put to a test. In Parliament, Lord Gorden
attempted to stop a bill to restore civil rights to Catholics.3 He drew support from large
numbers. Rioting led to the destruction of several public buildings. When an attack was
launched against the Bank of England, the building was secured like a fortress and withstood
the onslaught, hence the phrase "as safe as the Bank of England". Through the years, the
phrase has been simplified into "as safe as the bank". As banks and central banks store gold
and money in their vaults, their edifices have always been solid, protected by thick walls. In a
figurative sense, it might be said that a safe and credible national monetary value relied for a
long time on thick central bank walls insulating its internal workings from the general public.
Until our time, central banks have been closed, both physically and figuratively. Central
banks were shrouded in an aura of mystique, which they probably had a hand in
perpetuating. Central bank governors worldwide refrained from saying too much, and what
they did say often sounded cryptic.
1
The duty of confidentiality for Norges Bank employees is laid down in Section 12 of the Norges Bank
Act. Violation of the duty of confidentiality is punishable under the General Civil Penal Code: "Any
person who wilfully or through gross negligence violates a duty of secrecy which in accordance with any
statutory provision or valid directive is a consequence of his service or work for any state or municipal
body shall be liable to fines or imprisonment for a term not exceeding six months" (Section 121, first
paragraph of the General Civil Penal Code).
2
In 1975, David R. Merrill, a law student, instigated legal proceedings against the Federal Open Market
Committee (FOMC) in the US, charging that the FOMC violated the Freedom of Information Act by deferring
public disclosure of its interest rate decision by 90 days. The case was eventually heard by the Supreme
Court. The Supreme Court ruled that the Federal Reserve could continue its practice if it could provide an
adequate explanation showing that immediate disclosure would significantly harm the Government's monetary
functions or commercial interests. The Supreme Court left the assessment of this explanation to the district
court. The district court concluded that it lacked the expertise necessary to substitute its judgment for that of
the FOMC and the Federal Reserve did not begin to release its monetary policy decisions on the same day
until 1994. See Marvin Goodfriend (1986): "Monetary mystique: secrecy and central banking", in Journal of
Monetary Economics, 17, no. 1, pp. 63-92.
3
The bill also enabled Catholics to serve in the British army. British military forces were involved in conflicts in
many countries at the time and needed more manpower. See A. Andréadès (1966): History of the Bank of
England 1640-1903, 4th edition, Frank Cass & co. Ltd.
BIS Review 140/2009
In Norway, monetary policy was probably also perceived by many as something mysterious
and remote. In the Festschrift for former Norges Bank governor Hermod Skånland, Professor
Preben Munthe writes the following:
"There is a tradition that expects central bank governors to be parsimonious
with words. This built up the aura that should surround a man in that
position. He possessed knowledge about the secret black box - monetary
policy with a capital M - and how it functioned. Without asking others, he
changed the discount rate and thereby intervened in the economy with
authority and deep insight. On seldom occasions did he step down from his
cloud of wisdom to impart life's economic truths to a gaping public."4
A change in views and practices relating to transparency first occurred in recent years, both
in Norway and other countries.5 It can safely be said that the change has been swift and
radical. Today, most central banks are open about (i) the objective of monetary policy, (ii) its
strategy for reaching the objective and (iii) the background for and the process behind
interest rate decisions.
Norges Bank is no exception in this respect. In some areas, Norges Bank has gone further
than others. For example, Norges Bank is one of the few central banks in the world that
publishes forecasts of its own interest rate decisions.6
What then can explain this tendency towards greater transparency? I would highlight two
main reasons. First, there has been a general trend in society towards greater transparency.
Second, economic thinking has changed considerably. Simplifying somewhat, the former
view was that monetary policy operated effectively by surprising economic agents. Today,
economic theory posits that monetary policy works best if it is predictable.
I will come back to the economic theory, but allow me to start by some changes in society at
large.
Transparency of economic policy
The economic crisis in the 1930s shattered confidence in free market forces. Markets had to
be controlled. The British economist John Maynard Keynes was working on ways of
regulating and improving markets. Prominent Norwegian economists, with Ragnar Frisch at
the fore, went even further. They advocated that the market economy must be replaced by a
planned economy. Ambitions were high. One could almost say that transparency, in carefully
selected portions, was a tactical tool.7
It reached a head in 1973 when a commission led by
4
Preben Munthe (1994): "Økonomen (The Economist)" in Jan. F Qvigstad, Sigbjørn Atle Berg and Kjell Storvik
(eds.): Stabilitet og langsiktighet: festskrift til Hermod Skånland (Stability and a long-term perspective:
Festschrift for Hermod Skånland), Aschehoug, p. 73.
5
See for example Alan S. Blinder, Michael Ehrmann, Marcel Fratzscher, Jakob De Haan and David-Jan Jansen
(2008): "Central Bank Communication and Monetary Policy: A Survey of Theory and Evidence", in Journal of
Economic Literature, 46, no. 4, pp. 910-945 and Petra M. Geraats (2002): "Central Bank Transparency", in
The Economic Journal, 112 (November), pp. F532-F556.
6
See for example Financial Times (Ralph Atkins), 2 March 2007, p.11: "Central bankers eye Norway's clarity on
rates" and Michael Woodford (2007): "The Case for Forecast Targeting as a Monetary Policy Strategy", in
Journal of Economic Perspectives, 21, no. 4, pp. 3-24.
7
In 1959, Petter Jacob Bjerve, then director general of Statistics Norway, wrote that "Apparently, the question
of whether national budgets should be published involved an optimum problem: considering both advantages
and disadvantages of publishing, any cabinet will probably decide what to publish so as to achieve best
possible results of its policy, according to the social preferences of the cabinet." See Petter Jacob Bjerve
(1959): Planning in Norway 1947-1956, North-Holland Publishing Company, p. 352.
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Hermod Skånland proposed the establishment of an incomes-policy council that was to
decide the limits for wage growth in Norway.8
But the proposal was not in tune with the new views which were already taking root in
society. The council was never established. Domestic and international developments in the
1970s weakened the conviction that the economy could be fine-tuned. While market failure
regulatory
was the main concern earlier, focus now shifted to failure. The political pendulum
swung away from government control and towards market liberalisation.9 When
decisionmaking was to be decentralised, it was important that the decision-makers acted in line with
the overriding policy objectives. New transparency and disclosure requirements were
designed to this end. The requirements were largely set out in the Public Administration Act
of 1967 and the Freedom of Information Act of 1970.
Today, transparency and disclosure requirements also apply to Norwegian enterprises,
particularly to listed companies.10 The legislation is to ensure that all shareholders receive
adequate, correct and timely information from the company. Companies must be open and
assure equal treatment of all owners. Well-functioning equity markets rely on confidence that
everyone has access to the same information about the company.
Transparency is natural in a democracy
Transparency is natural in a democracy and is important to ensure accountability among
decision-makers. The Danish Nobel laureate in physics Niels Bohr supposedly once stated
that "The best weapon of a dictatorship is secrecy, but the best weapon of a democracy
should be the weapon of openness".
Yesterday was the twentieth anniversary of the fall of the Berlin Wall. This event has become
a symbol of the fall of the iron curtain. We recall from those times the Russian word glasnost,
which means openness. Mikhail Gorbachev sought to modernise the Soviet Union and used
glasnost as a means of reducing corruption and abuse of power. In western democracies,
glasnost
the term took on a broader meaning, and was associated with détente between
East and West in the 1980s.11
As mentioned, the shift towards a more decentralised economy both in Norway and abroad
reflected the failure of centralised planning. Monetary policy is an important component of the
economic policy framework.12 In my lecture here last year,13 I noted that it can be demanding
for the political authorities to ensure price stability because low interest rates are often more
high appropriate
popular than interest rates. An interest rate may therefore be demanding to
8
See NOU (Official Norwegian Report) 1973:36 Om prisproblemene (On price problems).
9
For an account of economic policy in Norway in the twentieth century, see Tore Jørgen Hanisch, Espen Søilen
and Gunhild J. Ecklund (1999): Norsk økonomisk politikk i det 20. århundre. Verdivalg i en åpen økonomi
(Economic policy in Norway in the 20th century. Ethics in an open economy), Høyskoleforlaget.
10
See i.e., chapter 5 in the Norwegian Act on Securities Trading.
11
In Norway, the concept is also associated with Jahn Teigen's contribution "Glasnost" in the national final of the
Eurovision Song Contest 1988.
12
During the financial crisis last winter the Government wrote: "Monetary policy is the first line of defence in
countering a setback in the economy". See Report No. 37 (2008-09) to the Storting (Norwegian parliament)
"Om endringer i statsbudsjettet 2009 med tiltak for arbeid (On changes in the 2009 Budget and labour
measures), Ministry of Finance, p. 6.
13
The lecture entitled "On keeping promises", remarks by Endre Stavang and Henrik Syse and Francis
Sejersted's summary of the debate have been published in Nytt Norsk Tidsskrift 1/2009.
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set in government corridors.14 Most government authorities in democratic countries have
solved this problem by delegating interest rate setting to an independent central bank.
But how can the conduct of monetary policy, which has such far-reaching consequences for
so many, be delegated in a democratic country? How is one to ensure that decisions are in
line with the interests of society? These questions become more relevant, the more room
there is for judgement in interest rate setting.
When the operational objective was a fixed exchange rate, the room for judgment was very
limited. Norges Bank's task was to maintain a fixed krone exchange rate. Monetary policy
was more or less on "autopilot". In a narrow sense, this was a very open policy. The public
could at all times observe the krone exchange rate and monitor that the Bank was performing
its duty. Many of you perhaps remember the era when a dollar cost 7 kroner and 14 øre.15
On the basis of purely democratic considerations, there was little need for transparency
about the assessments underlying the use of instruments.
The exchange rate was fixed, but occasionally the target value was adjusted. At those times
the cards were held close to the breast. On occasion it was even necessary to break the
eighth commandment (that is to lie). Around the end of 1986, journalists in the newspaper
Nordlys were asked to take a retrospective look at the past year. One of them recalled an
interview with the state secretary of the Ministry of Finance, Bjørn Skogstad Aamo. In the
interview Skogstad Aamo flatly denied rumours of a krone devaluation. But before the
interview was printed, the news agency NTB reported that the krone had been devalued by
12 per cent.16 Perhaps the journalist was disappointed but Skogstad Aamo was not criticised
for breaking the eighth commandment.
Over the last decade, the objective of monetary policy has not been a fixed krone exchange
rate, but price stability through low and stable inflation.17 According to the monetary policy
regulation the objective is inflation of close to 2.5 per cent over time. But how long is over
time? And what is close to 2.5 per cent? With these formulations, it is no longer that easy to
evaluate monetary policy. There are several reasons for this. First, it takes up to one to two
years for a change in the interest rate to feed through to inflation. Second, inflation is not only
influenced by the interest rate. For example, precipitation levels can have a strong impact on
electricity prices. Third, we set interest rates also with the aim of promoting stability in output
and employment. If the economy is exposed to severe shocks, we may at times seek to bring
inflation rapidly back to target, while under other conditions we deliberately choose a longer
horizon.
An evaluation of monetary policy cannot therefore be based on the latest figures for inflation.
Instead, one must check whether average inflation over a somewhat longer period has been
14
This is discussed by Finn Kydland who won the 2004 Nobel Prize in Economics with Edward Prescott for their
analysis of the problems of economic planning. See Finn Kydland and Edward Prescott (1977): "Rules rather
than discretion: The inconsistency of optimal plans", in Journal of Political Economy, 85, no. 3, pp. 473-491.
15
The central value of the Norwegian Krone against the US dollar was 7.14 from 18 September 1949 to 15
August 1971. See addendum, prepared by Ragna Alstadheim, to Jan F. Qvigstad and Arent Skjaeveland
(1994): "Valutakursregimer - historiske erfaringer og fremtidige utfordringer (Exchange rate regimes -
historical experiences and future challenges)" in Jan. F Qvigstad, Sigbjørn Atle Berg and Kjell Storvik (eds.):
Stabilitet og langsiktighet. Festskrift til Hermod Skånland (Stability and a long-term perspective: Festschrift for
Hermod Skånland), Aschehoug.
16
This story is reported in the article "Borten i fokus og bestillingsverk (Borten in focus and commissioned
works)", Aftenposten, 3 January 1987.
17
See for example Report No. 29 (2000-2001) to the Storting from the Ministry of Finance and the Regulation on
Monetary Policy from 29 March 2001.
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close to 2.5 per cent. Measuring performance is possible, but can only be done with a time
lag.18
The combination of (i) delegated authority to conduct policy, (ii) room for discretion and (iii)
difficulties in the day-to-day monitoring of results imply a risk of a democratic deficit.
Transparency and disclosure are the institutional solution to this problem. Even if a central
bank is independent in the conduct of monetary policy, it must be accountable to
government. We must be measured on our performance, but also on our assessments and
decisions. This requires transparency. The need for transparency therefore depends on the
monetary policy regime. Internationally, there is also a tendency for inflation-targeting central
banks to be more transparent than countries with a fixed exchange rate regime.19
Transparency about Norges Bank's activity is required by law. When the Storting (Norwegian
parliament) amended §100 on the freedom of expression in the Constitution, the freedom of
information principle was enshrined in the Constitution.20 This was the first time this article
had been amended since 1814. The legislative amendments were partly based on the
proposals of the Freedom of Expression Commission, which was headed by Professor
Francis Sejersted.21 In addition, Norges Bank is subject to a transparency requirement in the
Freedom of Information Act and the Act on Norges Bank and the Monetary System.22
In some areas, we are even more transparent than what is required by law. Norges Bank's
Monetary Policy Report includes a thorough account of our assessments of economic
developments and interest rate setting. As mentioned in the introduction, we even publish a
forecast for our future interest rate decisions. After each monetary policy meeting, a press
conference is held where we explain the interest rate decision and answer questions from
journalists. The press conference is webcast live and usually broadcast on TV. People can
subscribe to receive an SMS message about interest rate decisions, and Norges Bank was
apparently the first central bank to publish its interest rate decisions on Twitter.
International developments have made it prestigious for central banks to be as open as
possible. But transparency cannot be a goal in itself. Our responsibility is to conduct an
effective monetary policy in line with the objectives laid down by the political authorities.
Transparency beyond that necessary to ensure democratic accountability is a goal derived
from the main goal of conducting an optimal monetary policy.
18
Lars E. O. Svensson, Deputy Governor at Sveriges Riksbank, has argued that it is possible to evaluate
monetary policy actions ex ante. See Lars E. O. Svensson (2009): "Policy Expectations and Policy
Evaluations: The Role of Transparency and Communication", address at the conference "Tio år med
självständig Riksbank (Ten years with an independent Riksbank)" 11 September 2009.
19
See Nergiz Dincer and Barry Eichengreen (2009): "Central bank transparency: causes, consequences and
updates", NBER Working Paper 14791 and Petra M. Geraats (2009): "Trends in Monetary Policy
Transparency", in International Finance, 12, no. 2, pp. 235-268.
20
The new legal text establishes the so-called principle of free access to public records which provides public
access to central and local government documents and the right to be present at sittings of the courts and of
administrative bodies elected by the people.
21
NOU (Official Norwegian Report) 1999: 27 "Ytringsfrihed bør finde Sted (There shall be freedom of
expression)". Sejersted was awarded the Ossietzky Prize for his contribution to freedom of expression in
2008.
22
In the Norges Bank Act of 1985, Norges Bank is required to "inform the public of the assessments on which
monetary policy decisions are based". In October 2009, a new government communications policy was laid
down by the Ministry of Government Administration and Reform, promoting transparency as an important
principle of good communication. The government's communication is required to be open, clear and
accessible. The government is also required to ensure that relevant information reaches the relevant parties
and that the information is adapted to the relevant target groups.
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Modern economic theory argues in favour of transparency
I mentioned that the previous view was that monetary policy operated by surprising economic
agents, while the prevailing view is that it works best by being predictable. According to
modern economic theory, economic decisions are heavily influenced by expectations.23 This
has also become an important economic policy recognition. Today's key rate is important,
but even more important is the expected key interest rate ahead. When the owner of a firm
takes up a loan to build a new factory, the expected interest rate over the life of the loan is
taken into account. When the key rate was reduced sharply in autumn last year, we sought to
communicate that the interest rate would remain low for a period, and not be raised back to
the former level already the following week or month.
According to theory monetary policy to a large extent seeks to affect expectations. We
believe that by being transparent about our own interest rate forecasts, it is easier to
influence expectations. This enhances the effectiveness of monetary policy.
But the interest rate forecast is a forecast, and not a promise. The future is uncertain. Actual
interest rate developments may therefore deviate from our forecasts. We try to be open
about how we will react if new information implies a different interest rate path.
Transparency about Norges Bank's reaction pattern is a necessary element in the interaction
with fiscal policy. It is important that the government and the Storting know the central bank's
response pattern when the size of government budgets is decided. It is also an advantage for
the social partners take this into account.
Our view on transparency and good communication is inspired by Wim Duisenberg, the first
President of the European Central Bank. His definition of transparency was that "the external
communication should reflect the internal deliberations".24
We have all experienced that memory is imperfect. The easiest approach is therefore to
employ the same narrative everywhere. What we say in the Executive Board is also what we
say to the Minister of Finance, at press conferences and in speeches. Earlier we asked
ourselves: Are there any particular reasons to release this information? Now we ask
ourselves whether there are any particular reasons not to be open. The Duisenberg principle
is a practice guideline for us.
Some studies show that transparency about the monetary policy target helps anchor inflation
expectations.25 The more credible monetary policy is, the more effective the interest rate will
be in stabilising output and employment.26
Transparency provides good incentives. When we publish our analyses, we tend to make an
even greater effort to ensure the quality of the analysis. Open external communication also
23
See for example Michael Woodford (2005): "Central-Bank Communication and Policy Effectiveness", in The
Greenspan Era: Lessons for the Future, Federal Reserve Bank of Kansas City, pp. 399-474.
24
Willem F. Duisenberg (2001): "The ECB's monetary policy strategy and the quantitative definition of price
stability", Letter of Dr. W. F. Duisenberg, President of the ECB to the Chairperson of the Committee on
Economic and Monetary Affairs, 13 December 2001.
25
See for example Georgios Chortareas, David Stasavage and Gabriel Sterne (2002): "Monetary Policy
Transparency, Inflation and the Sacrifice Ratio" in International Journal of Finance & Economics, 7,
pp.141155, and Nergiz Dincer and Barry Eichengreen (2009): "Central bank transparency: causes, consequences
and updates", NBER Working Paper 14791.
26
Openness about how the interest rate is set also seems to generate less volatility in financial markets at the
time of monetary policy meetings, resulting in more stable market rates. See for example Richild Moessner
and William R. Nelson (2008): "Central bank policy rate guidance and financial market functioning", in
International Journal of Central Banking, 4, no. 4, pp. 193-226, and Amund Holmsen, Jan F. Qvigstad, Øistein
Røisland and Kristin Solberg-Johansen (2008): "Communicating monetary policy intentions: The case of
Norges Bank", Norges Bank Working Paper, 2008/20.
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places demands on our communication skills. I am certain that many teachers and lecturers
would agree that teaching is not only a means of conveying knowledge to students, but also
provides the lecturer with a deeper understanding of the subject. The same applies to central
bankers. External communication of our analyses has certainly not reduced our competence
as economists.
How transparent should the central bank be?
How open should we be? Maximum transparency about Norges Bank's decisions would
imply filming the Executive Board's meetings and webcasting them live. In addition, we could
perhaps have installed cameras and microphones in some of the offices and meeting rooms
in Norges Bank where the analyses are conducted that form the background for the
Executive Board's decisions. Perhaps I am old-fashioned, but I think that a "reality series"
about Norges Bank would not be particularly entertaining and would not foster particularly
good decision-making.
Maximum transparency is probably not optimal, but how far should we go? There is no
absolute answer to this. In the following, I will discuss several considerations that must be
taken into account.
Should we publish voting records and the minutes of the Executive Board's deliberations?
Central banks have chosen different solutions. In Sweden, the central bank publishes the
voting records and provides an extensive report with the views of members by name. The
Bank of England publishes a similar report of the minutes, but members remain anonymous.
Norges Bank does not publish a report of the minutes of the Executive Board's deliberations,
but instead publishes a detailed account explaining the Executive Board's background for the
interest rate decision. The interest rate decision is based on a strategy that is described in
the Monetary Policy Report. The Report also presents the analyses underlying the strategy.
The basis for interest rate decisions is thus available to the general public.
The difference in practices partly reflects the different character of the monetary policy
committees in the three countries.27 Sveriges Riksbank and the Bank of England have
committees that are referred to as "individualistic committees". Each member is individually
responsible for his/her vote, and the decision28 is normally decided by majority voting. In
Norway, the Executive Board is more of a "collegial committee", where the members are
unanimous in their decision. The ECB's system is of the same type. One cannot have both a
collegial committee and minutes with individual views.
If all members publicly explain their own views, communication may become unclear. Alan
Blinder, former vice chairman of the Federal Reserve and now professor at Princeton
University, argues that "a central bank that speaks with a cacophony of voices may, in effect,
have no voice at all".29
There is also another argument in favour of unanimous decisions. Central banks are
important social institutions, which should not be too closely linked to individuals but have a
public identity. The institution and its mandate should take precedence over the individuals
who occupy positions for limited periods.30
There is no formula for deciding which system is best. Each system has its strengths and
weaknesses. Detailed meeting minutes ensure accountability among committee members.
This may give rise to good incentives. On the other hand, such transparency may inhibit the
actual discussion. Members may come to meetings with pre-drafted statements, impairing a
constructive exchange of views.
Researchers have compared tapes of the Fed's FOMC meetings before and after it was
decided that the minutes should be published.31 The tapes show that the form of discussion
changed. During the period following the decision to publish the minutes, there was a greater
tendency for members to read prepared statements.
Detailed minutes also entail a risk of moving the real discussion from the official meeting into
closed rooms. In that case, a real increase in transparency has not been achieved. The US
was aware of this risk and introduced legislation to prevent such informal meetings. They
called this law the "Government in the Sunshine Act",32 where the name symbolises that
important decisions should be taken in the public light. The law defines a meeting as a
consultation between a quorum of committee members. Stretching it somewhat, this means
that if some members are chatting in the corridor, they must stop talking about the interest
rate and start talking about the weather if the group grows to a certain size.
The notion that increased transparency can hamper a free exchange of views is not new.
The delegates to the Constitutional Convention in Philadelphia in 1787 decided to veil the
deliberations in secrecy. According to the Virginia delegate James Madison, who later
became the fourth US president, secrecy was crucial for succeeding in the work on the US
Constitution. He argued that full disclosure would fuel reluctance among delegates to
express their true opinions. Jon Elster has explored various aspects of transparency and
constitutions in his research. He notes that that even if secrecy can lead to a freer
discussion, it can also lead to negotiations based on vested interests.33 Threats and power
struggles can be effective behind closed doors, but rarely tolerate public scrutiny.
The arguments that were used in Philadelphia can be found in the debate on public
disclosure of government papers and cabinet deliberations. In a supreme court ruling from
1994, the first-voting judge Steinar Tjomsland writes: "The possibility that governments
should testify before the court (...) could inhibit free political exchange of information and
debate (...)".34
If we today even know what Tjomsland wrote, it is because the Supreme Court's doors were
opened in 1863. The law on transparent voting in the Supreme Court was adopted after a
nearly fifty-year conflict between the Storting and the other two branches of government.35 In
1821, Christian Magnus Falsen put forward a proposal for the public disclosure of voting
30
See for example Otmar Issing (2005): "Communication, Transparency, Accountability: Monetary Policy in the
Twenty-First Century", in Federal Reserve Bank of St. Louis Review, 87, no. 2, p.73.
31
Ellen E. Meade and David Stasavage (2008): "Publicity of debate and the incentive to dissent: evidence from
the US Federal Reserve", in The Economic Journal, 118, pp. 695-717.
32
Government in the Sunshine Act (5 U.S.C. 552b).
33
See Jon Elster (1995): "Forces and Mechanisms in the Constitution-Making Process", in Duke Law Journal,
45, no. 2, pp. 364-396.
34
Norsk Retstidende (Norwegian journal of law) 1994-1036, p. 1044.
35
The Storting had adopted a Bill on transparency in the voting process four times since 1818, but assent to the
Bill was refused each time.
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records in the Supreme Court.36 He argued that public disclosure was "the most effective
means of ensuring confidence and respect for any government authority is by awakening a
noble pride among senior civil servants and hence instilling in them respect for the voice of
the people".37 The Supreme Court had a different view and argued that it could undermine
confidence in the Court if the public discovered doubt or a lack of competence among
judges.38 Today, there seems to be little controversy surrounding the disclosure of voting
records in the Supreme Court.39,40
Norges Bank is not only responsible for securing price stability, but also has a duty to
promote stability in the banking system and financial markets. In principle, the same
transparency considerations apply here, but with certain exceptions.41
Many of us were surprised and experienced associations with the interwar years when we
saw television footage of depositors queuing at the doors of the crisis-hit British bank
Northern Rock in 2007. In a situation where a bank's solvency comes into doubt, depositors
may rush to withdraw their cash. It is easy to conceive of a situation where a bank that is in
fact solid, but has payment problems, might collapse if the authorities expose the problems
to the general public. Moreover, banks may take excessive risks if they know the authorities
will come to their rescue. It can be argued that in this case it may be appropriate for the
36
Guthorm Immanu