Looking ahead, volatility in global capital markets may have a pronounced impact on the value of the GPFG, to both the upside and the downside. Good institutions can enable us to use favourable periods to create long-term value. The same institutions can also help us through less favourable periods without permanent damage. And, unlike either good or bad luck, institutions, as a rule, are more permanent. The future management model for the GPFG is ultimately a matter of institutions that are supposed to be long-lasting. Norges Bank’s societal and constitutional role has provided a stable framework for the fund. Should the framework that the Bank can provide still be the decisive factor, or has the fund now become so large and investment management so extensive, that the assets can be best preserved and grown in a separate organisation? The Commission’s recommendation and the ensuing debate show that there is a wide range of views. The discussion reflects both the evolution towards an increasingly complex fund and the fund’s key role in Norwegian politics and Norway’s economy. But once the decision is made, the issue of the fund’s future organisation must be regarded as settled. Regardless of the outcome, we must be prepared to live with the chosen governance model for many years to come. Broad political consensus is an effective guarantee in this context. 1 Regjeringen.no: Pressemelding 16.02.2017 Økt aksjeandel i pensjonsfondet og justert anslag for  fondsavkastningen” 2 The non-oil deficit as a percentage of total general government expenditure.

The Commission itself points out that the Ministry may hand over more decision-making responsibility regarding investment strategy and asset composition to the manager, as is the case with many other sovereign wealth funds. It is also possible that the investment strategy may be broadened to include more unlisted asset classes, such as infrastructure and private equity. These sorts of investments will place heavier demands on executive management and the governance structure and require a larger and more complex organisation. Moreover, demands and expectations concerning the fund’s exercise of ownership rights may increase further. The Commission raises the question of placing the Council on Ethics within the management organisation. This would mean that the organisation given the responsibility of managing the fund will also be given greater responsibility for making ethical assessments. If there are prospects that investment management evolves as I have indicated above, it may be appropriate to organise the management of the fund outside the central bank. The fund must not be compromised The chair of the Central Bank Law Commission has underscored that “the fund must not be compromised” in the event of a new governance model. This was also a concern echoed in the public debate, reflecting fears that changes in the organisation of the fund may give special interests influence over investment management. I would like to highlight four areas that could have serious pitfalls: the primary objective of investment management, the division of responsibility in the governance model, board composition and cost-effectiveness.