Occupation and Loss of Autonomy

This chapter focuses on Norges Bank during the Second World War. The Second World War came to Norway on 9 April 1940, when German forces invaded the country. This was one of the darkest days in Norwegian history, but still one of the finest in Norges Bank’s history. In the chaotic morning hours, the large gold reserve was evacuated and, by a long journey in inland Norway and along the coast, finally brought to safety overseas. However, the rest of the war, and of the first pre-war years, brought less glory to Norges Bank. Already before the gold had departed Norway, a gradual inflation of the Norwegian monetary system had started because of the Germans’ requisitions of legal tender through the central bank. In the following years, large sums of Norwegian kroner were withdrawn from Norges Bank as a part of the financing of the occupational force’s activities in Norway. This created a large liquidity surplus, which made monetary policy more or less inefficient, until the surplus was finally eliminated around 1950.