There are mistakes that are expensive. Last year, the Norwegian sovereign wealth fund lost 980 million crowns, about 86 million euros, due to a simple calculation error caused by a poorly placed box in its gigantic spreadsheet. A human error that has caused million-dollar losses and once again shows how the lack of controls and review has an enormous impact.
Through the Financial Times we discovered the details of this story. Norges Bank has explained 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 enormous size of these national funds the impact was “0.7 points”, which forced the profits obtained to be reduced from about 118 billion Norwegian crowns to about 117 billion crowns. Specifically a difference of 980 million crowns.
Spreadsheets are too important
If this tiny error had occurred in other accounts, the difference would not have been as significant. But with national funds where an exceptional amount of resources moves, any deviation has great relevance in absolute terms.
What happened to this miscalculation? A simple human mistake. A wrong click.
As described in an internal report, the origin is an employee referred to simply as “Simon.” The description is priceless:
“My worst nightmare. It was a manual error. My mistake. “I used the wrong date, December 1 instead of November 1, as it was clearly marked.”
The error was not discovered until a few months later, since the year-end numbers did not match. The problem was quickly identified and corrected, but the damage had already been done.
The report describes how Patrick du Plessis, head of risk monitoring at the Norwegian national fund (NBIM), felt “physically ill” when he was told what had happened.
The story of this Excel error has been a lesson for the managers of the Norwegian fund. Nicolai Tangen, its CEO, explained in a conference in January 2024, how a “decimal error cost about 900 million.”
And the impact this has. As the manager himself describes: “Imagine that you come home from work one day and discover that a mistake has cost 40 hospital beds, 80 football fields and a tunnel on the west coast.”
Anyone makes a mistake
The most surprising thing is perhaps the reaction. “Simon” was not fired. As explained by the NBIM, this error made them more aware and if it could be solved quickly it is because “no one tried to cover it up and no heads were cut off.”
For example, the email that “Simon” and Patrick du Plessis received once everything happened, from the CEO:
These things happen! We run a complex operation and what surprises me most is that historically we have had very few if any incidents like this. You are both super professional and important contributors to the success of NBIM.
Patrick du Plessis is currently still working as risk manager for the Norwegian national fund.
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