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Norway's wealth fund should stay in central bank, government says

[OSLO] Norway's US$1 trillion sovereign wealth fund, the world's largest, should remain a unit of the central bank, the government said on Friday.

It also said the central bank should get a dedicated committee for monetary policy and financial stability, leaving more time for the bank's board to manage the wealth fund (GPFG).

The proposal comes after a state-appointed commission recommended last year the fund become a separate entity. The fund has been run by a unit of the central bank since it opened in 1996.

The fund funnels government revenues from Norway's oil and gas production and invests in stocks, bonds and property abroad. Proponents of a change had said it would be better supervised with a board offering more specialised competence on fund management and would alleviate pressure on the central bank.

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Instead of appointing a new board for the fund, however, the government proposed establishing a central bank committee for interest rates and stability in the financial system.

"By moving responsibility for these tasks to a separate committee, the board of the central bank can become more focused on and devote more time to the bank's other tasks, in particular management of the GPFG," the Finance Ministry said.

REUTERS