Latest / Best of Business / Jenee Tibshraeny: NZ Herald Wellington business editor on Adrian Orr's abrupt resignation from the Reserve Bank

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Jenee Tibshraeny: NZ Herald Wellington business editor on Adrian Orr's abrupt resignation from the Reserve Bank · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk ZEDB. Follow
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  Speaker 2: You're on News Talk ZB. It's fourteen after six. We
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  Speaker 2: tried to get to Adrian Or today. He's resigned. If
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  Speaker 2: you're just joining us suddenly, No one knows why we
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  Speaker 2: tried to get to him today. We asked the Reserve
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  Speaker 2: Bank of New Zealand's media team if he could come
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  Speaker 2: on the program. We heard nothing back from him. We called,
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  Speaker 2: we text Nada crickets the rumor mill now turning. Of course,
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  Speaker 2: no definitive reason was given for this departure. Jane Chips
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  Speaker 2: Trainey is the Herald Wellington business reporter who's with us
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  Speaker 2: this evening. Hi Jane, Hi, Ryan, Gosh, this was one
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  Speaker 2: out of the blue.
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  Speaker 3: It was I actually thought when my colleague Thomas Coglan
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  Speaker 3: told me, I thought he was joking in the office
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  Speaker 3: this afternoon just to evoke a reaction from me. It
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  Speaker 3: was definitely a surprise. Now tensions have been high between
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  Speaker 3: adrianaw and Nikola Willis, and that ishaps my best scarce
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  Speaker 3: to what's happened here. My guess, and this is not
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  Speaker 3: as my guess is that things might have hit breaking
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  Speaker 3: point now. There are a couple of things that have
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  Speaker 3: been happening. Firstly, the Reserve Bank has been asking the
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  Speaker 3: government for more funding. It's received a lot more funding
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  Speaker 3: in recent years because the sort of work that it's
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  Speaker 3: been doing has expanded, particularly in terms of the way
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  Speaker 3: it regulates banks and insurers. So that's one thing. Nikola
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  Speaker 3: Willis has talked to The Herald last weekend and basically
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  Speaker 3: said that she thought the Reserve banks requests weren't reasonable
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  Speaker 3: and really emphasized the fact that the government's actually trying
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  Speaker 3: to cut the amount of money at spending. So that
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  Speaker 3: is one issue. Another issue is the way the Reserve
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  Speaker 3: Bank goes about regulating banks. There are these bank capital
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  Speaker 3: rules that we've been talking about for a number of
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  Speaker 3: years that are there to protect banks and prevent them
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  Speaker 3: from collapsing. Nicola Willis has been looking at whether those
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  Speaker 3: could be watered down. That's something the banks would like,
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  Speaker 3: and that is something that some people think would support
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  Speaker 3: more competition in the banking sector. So I think those
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  Speaker 3: are two issues of contention and that they might have
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  Speaker 3: contributed to this decision. That is only that is only
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  Speaker 3: a guess.
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  Speaker 2: I think you're onto something with the funding for the
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  Speaker 2: Reserve Bank itself. And when you look at the staff numbers.
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  Speaker 2: Somebody's just texted, have you guys mentioned the number of
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  Speaker 2: staff working at the Reserve Bank years? Yeah, and we
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  Speaker 2: did mention that earlier in the show. But just for
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  Speaker 2: those who aren't aware, in twenty eighteen, two hundred and
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  Speaker 2: fifty five full time equivalent employees, now six hundred. Do
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  Speaker 2: you know there are reasons why that number has increased.
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  Speaker 2: You know that they are doing different things, but is
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  Speaker 2: that justified six hundred?
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  Speaker 3: Yeah, I mean it does. It's a lot, and it's
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  Speaker 3: hard to know, and I think it's a tough pill
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  Speaker 3: to swallow when one of the key jobs keeping inflation
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  Speaker 3: in check is something the Reserve Bank has failed at.
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  Speaker 3: Inflation was above the target range for three years. It
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  Speaker 3: got as high as and your rate, god, as high
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  Speaker 3: as I think it was just over seven percent. So
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  Speaker 3: you know that that is tough when you go, well,
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  Speaker 3: what's what's one of your key jobs and you didn't
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  Speaker 3: do it properly. Now a few of the other things though,
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  Speaker 3: that the bank is doing. One of the big things
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  Speaker 3: is it's working on standing up this deposit compensation scheme.
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  Speaker 3: So that's a whole new insurance scheme that means if
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  Speaker 3: your bank collapses, you get some of your money back. Currently,
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  Speaker 3: if your bank collapses or you or even your credit
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  Speaker 3: union or other non bank deposit taker, you won't necessarily
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  Speaker 3: get your money back. So there's that's a huge piece
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  Speaker 3: of work to create this insurance scheme around that. So
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  Speaker 3: so that is, for example, something that Adrian or would
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  Speaker 3: point to and say that this is a this is
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  Speaker 3: a big deal and we need more staff for that.
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  Speaker 2: Yeah, to know, I guess, Look, Wellington's a small place.
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  Speaker 2: We're all going to find out eventually what happened, don't we.
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  Speaker 3: We do see Adriana or walking around the streets and
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  Speaker 3: he will be asked. I mean. The timing of this
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  Speaker 3: is also unusual. It feels like court. It caught eronoff guard.
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  Speaker 3: The Reserve Bank called a last minute press conference at
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  Speaker 3: five o'clock today where the board chairs spoke to us
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  Speaker 3: again didn't provide too much more insight, but suggested that
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  Speaker 3: my theories, you know, might be correct. The other awkward
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  Speaker 3: thing is that the Reserve Bank is hosting this massive
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  Speaker 3: international conference tomorrow and on Friday, so we've got central
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  Speaker 3: bankers from around the world coming to Wellington, including you know,
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  Speaker 3: high profile people like the former Federal Reserve chair Ben Bernank,
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  Speaker 3: Catherine Man. You know, we're celebrating thirty five years of
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  Speaker 3: inflation targeting. The Reserve Bank of New Zealand is traditionally
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  Speaker 3: well respected around the world because we helped pioneer the
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  Speaker 3: approach that central banks take today. So to come out
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  Speaker 3: with this, and Nikola Willis said it was Adrianal's choice
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  Speaker 3: to come out with this the day before this conference,
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  Speaker 3: which is a big deal, is interesting. The other interesting
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  Speaker 3: thing is that the Reserve Bank said I couldn't attend
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  Speaker 3: the conference in person because there was not enough room
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  Speaker 3: and it's being live streams. So make of that what
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  Speaker 3: you will.
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  Speaker 2: Wait, So Adrian's not going to it.
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  Speaker 3: No, Adrian's not going to it.
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  Speaker 2: No, So he's thrown his toys in a massive ways.
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  Speaker 2: He's having a massive wobbley. That's my that's my opinion.
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  Speaker 2: I don't worry. I'm not asking for a response from you.
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  Speaker 3: Hot takes.
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  Speaker 2: Hot takes.
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  Speaker 3: This is that, you know, this is the thing, in
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  Speaker 3: the absence of a of a reason of you know,
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  Speaker 3: the Reserve being coming forward and Adrian or fronting it.
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  Speaker 3: This is this is this is what happens. We fill
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  Speaker 3: the void.
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  Speaker 2: Yeah, well consider it fell donat ship Trainey insid here
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  Speaker 2: at Wellington Business Supporter. Thanks so much for your time.
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