It’s been 200 years since Norway, armed with a new constitution and determined to be its own sovereign nation, managed to win approval for the creation of its own central bank. Celebrations climaxed this week and on Sunday, the boss of Norges Bank sang Norway’s Hurrah for you birthday song on a stage set up outside the bank’s headquarters in Oslo, surrounded by children.
Øystein Olsen was unusually informal in the brilliant sunshine that broke through after a few days of chilly rain. He, his colleagues and teams of retired bank employees hosted quite a party that didn’t only take place outdoors, on the square appropriately called Bankplassen, where three of the bank’s four headquarters buildings over the years are located. The bank actually opened its otherwise firmly locked doors to also take small groups from the public on guided tours inside the heavily guarded complex that covers an entire city block.
It was a unique opportunity to see how the building, which sparked heavy criticism when it finally opened 30 years ago because of delays and budget overruns, integrated historic old buildings and facades with new ones. Visitors were taken through its vast reception area, the mirrored room where the central bank boss delivers an annual address before the country’s top political and business leadership and past the vast array of oil paintings and other artwork that adorns the premises. Visitors also were ushered inside a vault that now serves as a library and through well-appointed interior but open-air courtyards that are otherwise hidden from public view.
Norges Bank first started operating in 1816 from offices in Trondheim, with just a branch in Oslo (then called Christiania) located at Bankplassen 3, a small building that now houses the National Museum of Architecture. Other branches eventually opened in other Norwegian cities as well. It was in Trondheim earlier this week where Olsen hosted Norges Bank’s formal bicentennial celebration with King Harald V among the guests on June 14, the day the Swedish king of Norway’s old union with Sweden had approved its creation.
The central bank’s main office was moved to Oslo in 1897 (then called Kristiania, with the more Norwegian “K” instead of “Ch”), and into a new location in 1906 at Bankplassen 4, which now houses Norway’s National Museum of Contemporary Art. The bank outgrew that space 80 years later, when it moved into the current headquarters where around 600 people work both for the central bank and its faster-growing unit that manages Norway’s huge oil fund, Norges Bank Investment Management (NBIM).
It was only fitting, perhaps, that the bicentennial party in Oslo be held on the plaza ringed by three structures that all housed central bank operations. Norges Bank has helped revitalize the area once better known for street prostitutes than finance. The goal, according to the bank, is to make the plaza, in the heart of the city’s historic area known as Kvadraturen, more attractive both in summer and winter in one of the city’s most historic areas. The area now features a variety of art galleries, cafes and restaurants, shops and hotels, and is also attracting residential development.
Crowds turned out to join in the celebrations, which included games for children, a marching band and performances highlighting the goals and purpose of the central bank, and its dramatic history. There were re-enactments of the formation of the bank and its controversial silver tax at the time, how the bank was once robbed (on New Year’s Eve 1835) and how the bank succeeded in transporting most of Norway’s gold that it was holding to London during the dramatic invasion of Nazi Germany in 1940.
Both Olsen and other bank officials who spoke at the celebrations stressed how the bank’s main goal is to secure the value of Norway’s money, through low and stable inflation and sustainable development of the economy. While the value of the money printed and minted by Norges Bank was once backed by silver and gold, it’s now arguably Norway’s oil that fuels its worth and the confidence traders have in it. Olsen noted how the interest rates that the bank sets are now historically low, but stated onced again that “they will rise” in the future.
Norges Bank will soon be issuing new currency notes featuring various aspects of the seas that have meant so much for Norway’s wealth and cultural heritage. It also has issued a new centennial coin, a 20-krone piece called Norgespulsen (The Pulse of Norway) featuring not only a traditional portrait of Norway’s monarch but also a graph depicting the ups and downs of the economy, through inflation and deflation. It was designed by Kjersti M Austdal of the Oslo National Academy of the Arts (Kunsthøgskolen i Oslo), whose entry was selected over 23 others submitted. She was on hand for the celebrations on Sunday, and took part in one of the tours to get a peek into the central bank itself.
Olsen can’t take off for any summer holidays just yet. After a busy week that included centennial celebrations and a conference featuring Christine Lagarde, head of the International Monetay Fund, the central bank’s executive board that Olsen heads will be announcing its latest decision on interest rate levels on Thursday. Many analysts expect the bank’s key policy rate will remain at o.5 percent. Given Olsen’s comment in front of the crowds on Sunday that rates “will rise” eventually, none of them can be too sure.