Øystein Olsen: Economic perspectives

Annual address by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), to the Supervisory Council of Norges Bank and invited guests, Oslo, 17 February 2022.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
18 February 2022


Today, nearly to the day, a hundred years have passed since the first annual address was delivered. The governor at that time, Nicolai Rygg, painted a gloomy picture. The speculative boom in Norway during the First World War had created a bubble that burst. A wave of losses ensued. The economy was marred by stagnation and bankruptcies. The problems in the business sector spread to the banks.

If banks had failed, the problems facing businesses would have intensified. It was therefore crucial to make sure the banking system weathered the crisis. There was no disagreement about that. The main issue under heated debate was who should bear the losses and who should guarantee new capital.

Not many weeks after the first annual address, Norges Bank had to step in to rescue one of the big banks. When the next big bank encountered problems, Norges Bank was again called upon to intervene. But Nicolai Rygg now put his foot down. The loans provided should be guaranteed by the State and not by Norges Bank.