2024-02-14 18:29:00
The Bank of Norway’s sovereign wealth fund, one of the most powerful in the world, lost 980 million Norwegian crowns in February 2023, as reported by our colleagues at the Financial Times. This corresponds to around 86 million euros.
This colossal loss is due to an encoding error in an Excel spreadsheet. Incorrect date entry, which caused calculation errors for several months. The bank explains that this comes from “an error linked to the way in which the fund calculated the benchmark index which had been assigned to it”.
”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 (or one billion euros),” continues the Norwegian Sovereign Fund.
The Norges Bank Investment Management employee responsible for the error told the Financial Times that it was a manual error. “I used the wrong date, December 1st instead of November 1st.” When the Norwegian government noticed the error and “reported that the figures did not correspond to reality,” the employee redid all the calculations “and the cause of the error was identified.” “I immediately reported this to the global head and my manager,” the employee continues. “I openly stated that it was my mistake, and mine alone.”
For his part, Nicolaï Tangen, big boss of the Fund, wanted to reassure his employee, as reported by our colleagues at BFMTV: “These things happen! You are both super professional and you contribute to the success of the company. Don’t let this ruin your weekend. Forward and uplift our hearts!”
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