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Adrian Orr – new Governor of RBNZ, recent media and some issues arising

23/04/2018

Adrian Orr is the new Governor of Reserve Bank of New Zealand, and he has been very visible to the media in the last few days.

However, to this observer he has seemed to be much more ready to comment on matters, generally, some of which are far outside his remit from Adam’s perspective. Another concern is that he tends to leave an impression of adopting stances which find favour with his political masters, despite his statutory independence. This could well be a concern going forward.

First RNZ

Then Q & A, link to transcript

Then two extracts from a post by Michael Reddell at Croaking Cassandra, but please read the whole piece – it is well worth the time

First which echoes Adam’s comment above:-

We have not yet seen an OCR decision on his watch, and journalists must already be relishing the first scheduled Orr press conference next month, given his readiness to comment at length on all matter of things that are no part of the responsibility of the Reserve Bank. It is great that he is fronting up to the media – in a way quite unknown during Graeme Wheeler’s term – but is there anything about which he will say, if asked, “well, that isn’t really something that would be appropriate for me, as central bank Governor, to comment on”? There has been no sign of such restraint so far.

It should be noted that the estimable Mr Reddell titled his post ‘A Garrulous Governor’ – he went on to comment:-

There are, of course, plenty of cases where central bank Governors overstep the bounds in their comments –  it is common enough to prompt Willem Buiter to write the paper I linked to on Friday –  but few with quite the degree of abandon of our new Governor.  For his own good, and that of the institution and New Zealand public life (avoiding the politicisation of key institutions), he needs to be reined in.   In one of the Stuff profiles on the new Governor he observed

The problem was finding something which suited his temperament.

“I am certainly attracted to wanting to make a difference.”

He is also attracted situations involving drama and excitement.

“Being a ginger, I tend to run towards the fire, rather than away from the fire.

Sounds like the sort of character that would suit many roles.  It doesn’t naturally sound like a Governor of a central bank.  Central banking –  monetary policy and financial stability –  done well should be boring (and not very politically divisive).  The image I often used to use was of the fire brigades at airports.  In an ideal world, if you ever give it a thought you take comfort from knowing they are there, but you don’t expect to hear from them, and hope they are never needed to do much.  The parallel isn’t exact, but I’d argue it is closer to the ideal than a garrulous Governor sounding off on every policy question some journalist happens to ask.  If he continues as he is starting, the value of his words will be greatly devalued.  And that would be a shame.

Many years ago one of Adam’s bosses noted that Adam tended only to comment on issues that he had a relevant opinion on and did not scatter gun opinions, thus ensuring that opinions when offered tended to get consideration. In essence ‘less is More’

One Comment
  1. getgreatstuff permalink
    24/04/2018 10:19

    I think what is more an issue is not knowing his facts and simply and wrongly blurting out numbers. It is a disgrace.

    80% of lending is in housing? That definitely is up the creek and does not sound right. As far as I know the numbers should be closer to
    .
    Household housing debt $167 billion
    Investor property debt $83 billion
    Business debt $105 billion
    Agricultural debt $60 billion
    Government Debt $97 billion
    Local Government Debt $17 billion

    Total NZ Debt is $529 billion

    Like

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