It's a small mistake that costs a lot of money.
In an article published this Friday, February 9, the British economic daily Financial Times reports how the sovereign fund of the Bank of Norway lost 980 million Norwegian crowns in February 2023, or around 86 million euros, for a simple error in a spreadsheet.
But how could such an error occur?
The bank explained that this came from “an error related to the way in which the fund calculated the benchmark index assigned to it”.
A return lower than expected
“This error resulted in a marginal overweighting of US fixed income relative to global fixed income.
When this error was discovered, we immediately set about correcting it, but due to the size of the fund, the return was 0.7 basis points.
As a result, the positive relative return was reduced to 117 billion Norwegian crowns (i.e. one billion euros),” the bank detailed.
Norges Bank Investment Management manages the Norwegian government pension fund, assets worth more than 15 trillion crowns, or around 1.3 billion euros.
The responsible employee mentions “a manual error”
Speaking to the Financial Times, the Norges Bank Investment Management employee responsible for the error spoke on condition of anonymity.
“It was a manual error.
My mistake.
I used the wrong date, December 1st instead of November 1st.”
It was only months later that the error was discovered by the Norwegian Ministry of Finance.
“He pointed out that the figures did not correspond to reality.
I redid all the calculations and the cause of the error was identified.
I immediately reported this to the global head and my manager.
I openly stated that it was my mistake, and mine alone.
I felt unhappy and I was ready to face the consequences, whatever they were,” said the man who gave his name as Simon.