The investment management of Government Pension Fund Global, Oslo, should be separated from Norges Bank, a government commission said in a report submitted to Norwegian Minister of Finance.
The panel proposed an investment management company be established to manage the 7.6 trillion Norwegian kroner ($893 billion) fund. The entity would have a government-appointed board, but the Ministry of Finance would continue to define the investment mandate of the fund, under the proposal.
"Both central banking and investment management place greater demands on the board, senior management and the organization than earlier. Moreover, the activities differ in nature, and the scope of the tasks involved is substantial. With two separate entities, the professional competence and the governing bodies can more easily be tailored to the task at hand," Svein Gjedrem, commission chairman, said in a news release.
The commission also offered an alternative model in which the pension fund would remain under Norges Bank. In this model, a board would be established for investment management that would be separate from the main Norges Bank board and from the committee for monetary policy and financial stability.