Latest / Best of Business / Michael Reddell: former Reserve Bank economist on the Reserve Bank disclosing individual Monetary Policy Committee members’ views on OCR decisions

Transcript

Michael Reddell: former Reserve Bank economist on the Reserve Bank disclosing individual Monetary Policy Committee members’ views on OCR decisions · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talks'd be follow
• 0:12
  Speaker 1: this and our wide range of podcasts now on iHeartRadio.
• 0:16
  Speaker 2: The Reserve Bank is introducing even more transparency under the
• 0:19
  Speaker 2: new governor. They've already increased the number of media conferences
• 0:22
  Speaker 2: they'll be doing, and then from today we will also
• 0:24
  Speaker 2: be told how the vote falls in ocr decisions, and
• 0:27
  Speaker 2: members of the committee who make those decisions will be
• 0:30
  Speaker 2: allowed to speak publicly about them. Michael Riddell is a
• 0:33
  Speaker 2: former Reserve Bank economist and with US Now Hi Michael,
• 0:36
  Speaker 2: Hi hether. I imagine you think this is a good move,
• 0:38
  Speaker 2: do you?
• 0:39
  Speaker 1: Yeah?
• 0:39
  Speaker 3: I do, but it's baby steps in the right direction.
• 0:42
  Speaker 3: You know, in most circumstances that won't be a vote
• 0:45
  Speaker 3: at all. So one of the features of the statement
• 0:46
  Speaker 3: today is they're still encouraged to operate by consensus, so
• 0:50
  Speaker 3: we'll only learn people's positions on those relatively rare occasions
• 0:53
  Speaker 3: when they choose to.
• 0:54
  Speaker 2: Have a vote, which are the only occasions that really
• 0:58
  Speaker 2: we would be interested in. Though ituld imagine because if
• 1:00
  Speaker 2: there's disagreement, it shows that it's contentious.
• 1:03
  Speaker 3: I mean, I think that's right. But the problem with
• 1:05
  Speaker 3: the line of encouraging consensus is that are probably encourages
• 1:09
  Speaker 3: people to sort of go along when they don't care
• 1:11
  Speaker 3: too much, and sometimes it would be useful to actually
• 1:14
  Speaker 3: have their positions articulated because they might not disagree very
• 1:17
  Speaker 3: much from the mainstream, but they might still have useful
• 1:19
  Speaker 3: angles that could be brought out. And you know, the
• 1:21
  Speaker 3: comparison the governor made the comparison that we're moving towards
• 1:25
  Speaker 3: matching some of the most transparent central banks in the world.
• 1:27
  Speaker 3: That's not quite right. So in Sweden, where she comes from,
• 1:31
  Speaker 3: for every ocr decision, each member has to articulate in
• 1:36
  Speaker 3: the published minutes their reasons for their views. Same thing's
• 1:39
  Speaker 3: just been introduced in the Bank of England, so you know,
• 1:42
  Speaker 3: it's a step in the right direction, but it is
• 1:43
  Speaker 3: a relatively modest one. They're encouraging board members to speak openly.
• 1:49
  Speaker 3: That's a marginal step forward from what was there before.
• 1:51
  Speaker 3: But the test's going to be whether some of them
• 1:54
  Speaker 3: actually take that opportunity. In Australia, by contrast, their newly
• 1:57
  Speaker 3: reformed Reserve Bank external members are required to do a
• 2:01
  Speaker 3: speech at least once a year. So, as I say,
• 2:04
  Speaker 3: steps in the right direction, the proof of the pudding
• 2:06
  Speaker 3: is going to be in the eating, how much eventually
• 2:08
  Speaker 3: gets closed, how many people choose to make speeches. So
• 2:11
  Speaker 3: I'm not criticizing it, It's just that it's not a
• 2:13
  Speaker 3: particularly bold move.
• 2:15
  Speaker 2: Okay. Now, do you think that it will necessarily lead
• 2:18
  Speaker 2: to interviews, because I read it as just a kind
• 2:20
  Speaker 2: of a soft If you want to do an interview,
• 2:21
  Speaker 2: you can do an interview, but you know whether they
• 2:23
  Speaker 2: want to.
• 2:23
  Speaker 3: Worry absolutely, And you know, the Reserve Bank cultures tended
• 2:27
  Speaker 3: to be relatively particularly on the external members. Now you know,
• 2:31
  Speaker 3: some of your colleagues I don't think have been particularly active.
• 2:34
  Speaker 3: I remember one NPC member telling me that he'd never
• 2:36
  Speaker 3: been approached by the media for an interview. So I
• 2:40
  Speaker 3: encourage a couple of your colleagues to sort of go
• 2:41
  Speaker 3: and ask. But I mean, I think probably interviews are
• 2:46
  Speaker 3: one thing, speeches or another. Probably at least what the
• 2:48
  Speaker 3: sort of specialist audience are more interested in is the
• 2:50
  Speaker 3: occasional speech that lays out the way in which people
• 2:53
  Speaker 3: are thinking and how they're thinking about the economy and
• 2:55
  Speaker 3: what drives it. One of the board the NPC members,
• 2:58
  Speaker 3: prison a guy from Auckland University, is clearly very keen
• 3:01
  Speaker 3: on doing that. I think we'll see more from him
• 3:03
  Speaker 3: some of the other two perhaps maybe shrinking violets, and
• 3:06
  Speaker 3: we'll have to sort of see whether they get encouraged
• 3:09
  Speaker 3: out of there the quietness of the MPC deliberation room
• 3:14
  Speaker 3: and be willing to be accountable.
• 3:16
  Speaker 1: I love it.
• 3:16
  Speaker 2: Hey, thank you very much, Michael has always good to
• 3:18
  Speaker 2: talk to you. Michael Radell, former Reserve Bank Senior economist.
• 3:21
  Speaker 1: For more from News Talks B listen live on air
• 3:24
  Speaker 1: or online, and keep our shows with you wherever you
• 3:27
  Speaker 1: go with our podcasts on iHeartRadio