Present:

Executive Board:

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

Apologies:

Kristine Ryssdal

Alternates:

Arne Hyttnes and Kristine Landmark

Employee representatives:

Mona H. Sørensen and Kristoffer Haugen (items 26-27, 35-43)

Office of the Supervisory Council:

Jan Frode Jakobsen (28-32, 35-43)

Deloitte:

Henrik Woxholt (29, 41), Roger Furholm (29)

Management:

Yngve Slyngstad (26-34), Trond Grande (26-38, 40-43), Dag Huse (28-29, 33), Lars Dahl (31-32, 35), Julie Belck-Olsen (28-29), John Tore Vatnar (33), Stephen Hirsch (35-38), Jan Thomsen (35-38), Merethe Riddervold (26-33, 35, 40-41), Jane K. Haugland (36-43), Ørjan Agdesteen (29, 39-41), Jan Tore Onerød (36-38), Kathrine Stang Ottesen (36-38), Mads Kristensen (28-32, 35-43), Renate Haugen (37), Magnus Eriksen (41), Line Vogt (41-42), Marianne Depraetere (43), Torbjørn Hægeland (44), Henrik Borchgrevink (44), Kjersti-Gro Lindquist (44), Kjersti Næss Torstensen (44), Runar Malkenes (26-44), Pål Haugerud (26-33, 35), Ingunn Valvatne (26-46), Bjarne Gulbrandsen (26-46)

There were no comments on the meeting notice and agenda.

Item 26/2018 Minutes of the Executive Board meeting of 24 January 2018

Discussion document:

• Draft minutes

The Executive Board approved the minutes of its meeting of 24 January 2018.

Item 27/2018 NBIM – Accrual and payment of performance-based pay for 2017

Discussion documents:

• CONFIDENTIAL memo from NBIM of 2 February 2018
• Memo from the Remuneration Committee of 6 February 2018

Trond Grande presented the matter for discussion.

Arne Hyttnes reported on the Remuneration Committee's discussions and the issues of particular concern to the Committee. The Committee recommended that the Executive Board follows management's guidance.

The Executive Board had an exchange of views and took note of the report on the accrual and payment of performance-based pay for NBIM in 2017.

Item 28/2018 "The Executive Board's assessment of the results" in the annual report on the GPFG for 2017

Discussion document:

• Memo from the General Secretariat of 31 January 2018

Ingunn Valvatne presented the matter for discussion.

The Executive Board discussed the matter and approved the statement "The Executive Board's assessment of the results". The Governor was authorised to finalise the statement based on the Executive Board's remarks. The assessment is to be included in the annual report on the management of the Government Pension Fund Global (GPFG) for 2017.

Item 29/2018 Annual report on the management of the GPFG for 2017

Discussion documents:

• Memo from NBIM of 1 February 2018
• Memo from the Audit Committee of 6 February 2018

Yngve Slyngstad presented the main elements of the annual 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 presented the auditor's report on the financial reporting of the investment portfolio of the GPFG.

The Executive Board discussed the matter and approved the annual report on the management of the GPFG for 2017. The Governor was authorised to finalise the report based on the draft presented and the Executive Board's remarks. The report will be published on 27 February 2018.

Item 30/2018 GPFG – Detailed information on Responsible investment 2017

Discussion document:

• Memo from NBIM of 5 February 2018

Yngve Slyngstad presented the main elements of the publication.

The Executive Board took note of the publication on responsible investment in 2017. The publication will be published on 13 February.

Item 31/2018 GPFG – Detailed information on Real estate Investments 2017

Discussion document:

• Memo from NBIM of 5 February 2018

Yngve Slyngstad presented the main elements of the publication.

The Executive Board took note of the publication on real estate investment in 2017. The publication will be released on 13 March.

Item 32/2018 Briefing on activities under the Norwegian Finance Initiative (NFI)

Discussion document:

• Memo from NBIM of 1 February 2018

Yngve Slyngstad presented the main elements of the annual report.
The Executive Board discussed the matter and took note of the annual report for the NFI for 2017.

Item 33/2018 Recommendation on exclusion and observation – Product-based coal criterion

Discussion documents:

• CONFIDENTIAL memo from NBIM of 30 January 2018
• Memo from the Ownership Committee of 30 January 2018

In the guidelines for observation and exclusion from the GPFG, a product-based coal criterion was introduced as from 1 February 2016. In accordance with the criterion, in 2017 and 2018, the Executive Board decided to exclude a total of 69 companies and place 13 companies under observation. At the same time, it was announced that the Bank would continue its information gathering and analysis work related to the criterion.

Egil Matsen presented the matter for discussion and reported on the Ownership Committee's discussions.

The Executive Board decided that companies labelled with "exclusion" in the appended list of companies are to be excluded from the GPFG's investment Universe. The Ministry of Finance is to be informed of the decision. The exclusions are to be effective from 1 May 2018. The Executive Board also decided that companies labelled with "observation" in the appended list of companies are to be placed under observation. The Governor was authorised to set a date for publishing the decision and the basis for the decision. The Governor was also authorised to grant exemptions from the deadline in situations with challenging liquidity or other special situations. The Executive Board is to be informed when the publication date has been set.

Item 34/2018 Briefing on relevant matters for Norges Bank Investment Management

Yngve Slyngstad gave a briefing on relevant matters for Norges Bank Investment Management.

Item 35/2018 Annual assessment of internal control in investment management

Discussion documents:

• Memo from NBIM of 1 February 2018
• Memo from the Audit Committee of 6 February 2018

Stephen Hirsch and Jan Thomsen presented the main elements of the annual reports on operational risk management and internal control in NBIM and NBREM, respectively.

Karen Helene Ulltveit-Moe reported on the Audit Committee's discussions and issues of particular concern to the Committee. The Committee recommended that the Executive Board follows management's guidance.

The Executive Board took note of the reports on operational risk management and internal control in investment management (NBIM and NBREM) for 2017. The reports are to be submitted to the Supervisory Council as attachments to the general assessment of the risk situation and internal control at Norges Bank for 2017 (cf. item 38/2018).

Item 36/2018 Report on operational risk management and internal control for Central Banking Operations 2017

Discussion document:

• CONFIDENTIAL memo from Governance, Risk and Compliance of 1 February 2018
• Memo from the Audit Committee of 6 February 2018

Kathrine Stang Ottesen presented the main elements of the annual report on operational risk management and internal control in Central Banking Operations.

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 Internal Audit's guidance.

The Executive Board took note of the report on operational risk management and internal control in Central Banking Operations for 2017. The report is to be submitted to the Supervisory Council as an attachment to the general assessment of the risk situation and internal control at Norges Bank for 2017 (cf. item 38/2018).

Item 37/2018 Internal Audit's annual report to the Executive Board for 2017

Discussion documents:

• Memo from Internal Audit of 1 February 2018
• Memo from the Audit Committee of 6 February 2018

Mads Kristensen presented the matter for discussion. 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 Internal Audit's guidance.

The Executive Board took note of Internal Audit's annual report for 2017. The report is to be submitted to the Supervisory Council as an attachment to the general assessment of the risk situation and internal control at Norges Bank for 2017 (cf. item 38/2018).

Item 38/2018 General assessment of the risk situation and internal control at Norges Bank in 2017

Discussion documents:

• CONFIDENTIAL memo from General Secretariat of 31 January 2018
• Memo from the Audit Committee of 6 February 2018

Under the regulation on risk management and internal control at Norges Bank, Executive Board is required to ensure that risk management and internal control are carried out and monitored, partly by considering reports from the operational areas and Internal Audit. The Executive Board is to send a risk assessment report for Norges Bank's operations to the Supervisory Council at least once a year.

Ingunn Valvatne presented the matter for discussion. 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.

The Executive Board discussed risk management and the quality of internal control in Central Banking Operations and in investment management.

The Executive Board's assessment is that:

• Internal control at Norges Bank was performed satisfactorily in 2017
• The level of operational risk exposure in investment management was within the Executive Board's defined risk tolerance throughout the year.
• Operational risk exposure in Central Banking Operations has been acceptable throughout the year.

The Executive Board's assessment is to be sent to the Supervisory Council. Internal control reports for 2017 for NBIM, NBREM and NBCBO, along with Internal Audit's annual report to the Executive Board for 2017, are to be submitted to the Supervisory Council appended to the Executive Board's assessment.

Item 39/2018 Operations report for Central Banking Operations 2017 H2

Discussion document:

• Memo from Corporate and Shared Services of 1 February 2018

Ørjan Agdesteen presented the main elements of the report.

The Executive Board took note of the operations report for Central Banking Operations for the second half of 2017.

Item 40/2018 Budget report for Norges Bank for 2017

Discussion document:

• Memo from Corporate and Shared Services' Finance Unit/General Secretariat of 1 February 2018

Under the Supervisory Council's budget rules for Norges Bank, the Executive Board is to report on the status of overall expenditure for the whole of the Bank as at 30 June and 31 December each year as a minimum. This reporting is to include a status report on performance against the approved budget for the Bank's total operating revenue, operating expenses and investments, and any significant reallocations and variations.

Ørjan Agdesteen presented the matter for discussion.

The Executive Board took note of the budget report for Norges Bank for 2017. The report is to be submitted to the Supervisory Council.

Item 41/2018 Norges Bank's annual report and financial statements for 2017

Discussion documents:

• Memo from Corporate and Shared Services' Finance Unit/General Secretariat of 1 February 2018
• Memo from the Audit Committee of 6 February 2018

Runar Malkenes and Ørjan Agdesteen presented the main elements of the annual report and financial statements.

Karen Helene Ulltveit-Moe reported on the Audit Committee's discussions and the issues of particular concern to the Committee, including developments in valuation uncertainty for the foreign exchange reserves and the GPFG. The Audit Committee concluded that its review and discussions provided answers to important questions related to the handling of Norges Bank's financial statements for 2017, and noted that:

• There is agreement between management and auditor on valuations.
• There are no uncorrected errors in the financial statements.
• There are no material shortcomings in the internal control of financial reporting.
• The audit has been conducted according to plan.
• No material issues have been identified by the external auditor.

On the basis of this and the auditor's report on the audit of the annual financial statements, the Audit Committee recommended that the Executive Board follows management's guidance.

Henrik Woxholt summed up Deloitte's audit of Norges Bank for 2017. He confirmed that Deloitte will be issuing an unqualified auditor's report and that, in Deloitte's opinion, the annual financial statements have been prepared in accordance with the law and regulations and give a true and fair view of the financial position of Norges Bank as at 31 December 2017 and of its financial performance and its cash flows for the year then ended in accordance with the regulation on Norges Bank's annual accounts.

The Executive Board adopted the annual report for 2017.

The Executive Board approved Norges Bank's annual financial statements for 2017 and will submit them to the Supervisory Council for adoption. The Governor was authorised to make editorial changes up until submission to the Supervisory Council.

The annual report will be published on 27 February 2018.

Item 42/2018 Central Banking Operations annual report for 2017

Discussion document:

• Memo from the General Secretariat of 1 February 2018

Runar Malkenes presented the main elements of the report.

The Executive Board took note of the 2017 annual report for Central Banking Operations.

The report will be published on 27 February 2018.

Item 43/2018 Norges Bank's Working Environment and Works Council / annual report for 2017

Discussion document:

• Memo from Corporate and Shared Services of 30 January 2018

The Governor introduced the annual report.

The Executive Board exchanged views and took note of the annual report for 2017 from Norges Bank's Working Environment and Works Council.

Item 44/2018 Letter to Finanstilsynet (Financial Supervisory Authority of Norway) – assessment of the regulation on requirements for new residential mortgage loans

Discussion document:

• Memo from Financial Stability of 31 January 2018

Torbjørn Hægeland presented the matter for discussion.

The Executive Board discussed the matter and authorised the Governor to finalise the letter to Finanstilsynet based on the draft and discussions at the meeting.

Item 45/2018 Briefing on current issues in Central Banking Operations

The Governor gave a briefing on current issues in Central Banking Operations.

Item 46/2018 Any other business

There was no other business.

The following were distributed for information together with discussion documents:

• Report from the Real Estate Investment Board meeting of 22 November 2017, Memo from NBREM of 26 January 2018
• Unlisted real estate investments – investment mandate for the CEO of NBREM, Memo from NBIM of 5 February 2018
• Monthly Board Report – GPFG Performance and Risk – December 2017
• Government Pension Fund Global – unlisted equity investments, Letter to the Ministry of Finance of 8 January 2018
• Expectations document on tax and transparency, Letter to the Ministry of Finance of 24 January 2018
• Supervisory reviews of the management of the GPFG in 2017, Letter to the Supervisory Council of 17 January 2018
• Report from the Audit Committee meeting of 12 January 2018