Bank of Norway lost 86 million euros due to Excel error. An employee went to the wrong box
A specific human error in a Norwegian sovereign fund spreadsheet caused a million-dollar loss
There are mistakes that are costly. Last year, Norwegian sovereign wealth fund lost 980 million crowns, approximately 86 million euros, due to a simple calculation error caused by a misplaced box in its giant spreadsheet. A human error that has resulted in millions of dollars in losses and once again shows how big an impact a lack of controls and review can have.
We got the details of this story via the Financial Times. Norges Bank reported that in February they found a “calculation error in the composition of the index”. Once the problem was discovered, they reversed it, but due to the sheer size of these national funds the impact was “0.7 points”, reducing the profit received from about 118 billion Norwegian crowns to about 117 billion crowns. Specifically a difference of 980 million crowns.
Spreadsheets are very important
If this small error had occurred in other accounts, the difference would not have been as significant. But with national funds where extraordinary amounts of resources move, any deviation has great relevance in absolute terms.
What happened to this miscalculation? A simple human mistake. One wrong click.
As described in an internal report, the original is an employee referred to only as “Simon”. Description is priceless:
“My worst nightmare. It was a manual error. My mistake. I used the wrong date of December 1st instead of November 1st because it was clearly marked.”
The error was not discovered until a few months later, because the year-end numbers did not match. The problem was quickly identified and corrected, but the damage was already done.
The report described how Patrick du Plessis, head of risk monitoring at the Norwegian National Fund (NBIM), felt “physically sick” when he was told what had happened.
This Excel error has a history Lessons for Norwegian fund managers, Its CEO Nikolai Tangen explained at a conference in January 2024 how “the decimal error costs about $900 million.”
And the impact it has. As the manager himself describes: “Imagine you come home from work one day and find that one mistake cost you 40 hospital beds, 80 football fields and a tunnel to the West Coast.”
anyone makes mistakes
The most surprising thing is probably the reaction. “Simon” was not fired, As explained by NBIM, this error has made them more aware and if it can be resolved quickly it is because “no one tried to cover it up and cut off someone’s head” Went.”
For example, after everything was done “Simon” and Patrick du Plessis received an email from the CEO:
these things happen! We run a complex operation and what surprises me most is that historically we have had very few incidents like this. Both of you are super professionals and important contributors to the success of NBIM.
Don’t let it ruin your weekend.
onward and upward!
Patrick du Plessis is currently working as a risk manager for the Norwegian National Fund.
Image | Norges Bank mika baumeister
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