Ownership and support
The central government controls the agency's Annual General Meeting and elects members to its Supervisory Board. The state also elects members of the Board of Directors.
KBN's Articles of Association cannot be altered save with the approval of the Government (the King). According to parliamentary tradition in Norway, material changes to the Articles of Association of a state instrumentality need to be presented to the Norwegian Parliament (Storting). It is Parliament that is responsible for all decisions regarding KBN's capital structure and dividend policy and also determining the target return on equity. The Government presents resolutions regarding KBN to Parliament in a separate chapter in the annual National Budget.
KBN benefits from a maintenance statement from the central government and in this statement it affirms that, "The Kingdom of Norway considers it to be its duty to ensure that Kommunalbanken is always in a position to meet its financial obligations". The maintenance statement underlines the central government's commitment to KBN as a government funding agency and the importance that it places in KBN as Norway's main provider of low cost finance to the local government sector.
The central government considers it extremely unlikely that KBN should require emergency state assistance due its exceptionally high quality asset base. The Kingdom of Norway regulates the municipal sector to which KBN lends, and under the Local Government Act, municipalities are prohibited from filing for bankruptcy and are subject to extensive oversight by the central government.