Michael Reddell isn’t a fan of the performance of Reserve Bank Governor Adrian Orr.
Croaking Cassandra: An embattled Orr
And then there was the press conference. I’ve seen some pretty poor performances from Governors over the years – early ones by Alan Bollard were often awkward, and as Graeme Wheeler became more embattled the defensive introvert, never comfortable with the media, took over. But this one was the worst I’ve seen, and from someone who has many talents in communications. But just not, so it is confirmed again, in coping with challenge, disagreement, or finding himself on the back foot. I doubt a senior politician would have got away with it, and it isn’t obvious why an unelected bureaucrat, uncomfortable at facing serious scrutiny, should do so.
The Governor and Deputy Governor faced several questions about the possible impact of the Bank’s capital proposals on farm lending – various commentators have suggested such borrowers will be among the hardest hit. The Bank attempted to push back claiming that any sectoral impacts were nothing to do with them, and all about banks’ own choices. But they seemed blind to the fact that banks will have more ability to pass on the additional costs of the higher capital requirements to some sectors, some borrowers, than others. And that is because of a point the Bank never addresses: their capital requirements don’t apply to all lenders.
The Governor came across as embattled from start to finish – embattled at best, at times prickly, rude, and behaving in a manner quite inappropriate for a senior unelected public official exercising a great deal of discretionary power, with few formal checks and balances. BusinessDesk’s Jenny Ruth – who often asks particularly pointed questions about the exercise of the Bank’s regulatory powers, and the lack of transparency around its use of those powers – was the particular target of his ire, and at one point he tried to refuse to take further questions from her.
The press conference deterioriated further as it got towards the end. Without specific further prompting, the Governor noted a certain frostiness in the room, and then launched off again in his own defence.
A couple of articles in the Herald in recent days tells us some more of the story. The first was from Liam Dann, who has in the past provided a trusty outlet for the views of successive Governors, and the second was a column from Pattrick Smellie, under the heading “Bunker mentality returns to the RBNZ?”, evoking unwelcome memories of the Wheeler governorship.
Orr very much needs to be pulled into line, for his own sake and that of the country (as single decisionmaker he still wields huge untrammelled power).
At present, he is displaying none of the qualities that we should expect to find in powerful unelected official – nothing calm, nothing judicious, nothing open and engaging, just embattled, defensive, aggressive, playing the man rather than the ball, all around troubles of his own making (poor process around radical proposals made without any robust shared analysis, all while he is prosecutor, judge, and jury in his own case).
He also notes something odd – “when we have no idea who will even be Secretary to the Treasury – lead economic adviser to the government – three weeks from now”. That’s if Treasury Secretary Gabriel Makhlouf stays in the job that long.
Is there really no replacement for him yet?
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