It came to my attention that the weekly political newsletter Trans Tasman has commented on the Reserve Bank’s inquiry into the possible leak of the OCR decision.
They noted “the markets didn’t move until after the cut….so no harm was done and Reddell now says it may not have been a leak”. The “now” in that sentence is what bothers me, with a suggestion that I have walked back from some earlier position.
So, to be clear:
At 8.04 am on 10 March I received an email from a person in a media organisation saying
We have just heard that the Reserve Bank is cutting by 25 basis points.
At 9.08 am I sent the following email to Reserve Bank Assistant Governor John McDermott and to Head of Communications, Mike Hannah
For what it is worth, I received an email an hour ago from someone telling me that they had just heard that the Bank was going to cut by 25bps this morning. I have no idea whether it was a well-sourced “leak” or just speculation, but I have no reason to doubt the person who told me, who in turn (as far as I’m aware) has no reason to pass on simple speculation.
There were a couple of brief follow-up emails in which I told them the exact time of the email I’d received and made clear that it had not come from anyone inside the Bank.
Later that day, in my post about the Monetary Policy Statement, I included this brief concluding paragraph
And finally, as I have noted to them, the Reserve Bank might want look to the security of its systems. I had an email out of the blue at around 8 this morning- most definitely not from someone in the Bank – telling me that the sender had just heard that the OCR was to be cut by 25 basis points. I have no way of knowing if it was the fruit of a leak, or just inspired speculation, and was relieved to see the foreign exchange markets weren’t moving, but it wasn’t a good look.
A week or so later I wrote a post about possible improvements in the way the Reserve Bank handles and releases information about the OCR.
In that post I noted
I went into town this morning to talk to the Reserve Bank’s inquiry looking into the possible leak of last week’s OCR announcement (see last paragraph here). I still have no idea whether there really was a leak, but it seems likely, and if so it seems likely to have come from one or other of the lock-ups the Bank runs, for analysts and for the media.
It “seems likely” to me mostly because if there was another explanation for the email I received, it would have been easy for the sender to have got in touch, either with me or with the Bank, to explain. Perhaps someone had misunderstood something they’d been told. Perhaps they were just testing me. Or whatever. Perhaps the sender has approached the Reserve Bank directly, but they certainly haven’t approached me.
The whole episode got a surprising amount of media coverage last week, on the back of this story by Hamish Rutherford. That story quoted a Reserve Bank spokesman as saying
“We are aware of an allegation that information may have been leaked ahead of the OCR announcement on 10 March,” a spokesman of the bank said.
In a clarifying post, I noted that I had made no “allegations” (see paper trail above), but had simply passed on, unprompted and as a concerned citizen and former employee, the information (the email) I had received. I noted:
I have been consistently clear that the email in its own right is not confirmation that a leak occurred, but it is troubling nonetheless, and raises the serious possibility of a leak. When I drew the matter to the attention of the Reserve Bank, they also expressed immediate concern and appropriately moved to initiate an inquiry.
I still fervently hope that the investigation is able firmly to conclude that no leak occurred.
And that is the last thing I have said on the matter. As readers will recognize, there has been no change in my account/arguments, and no allegations. There is one piece of evidence from me, and the Bank is inquiring into what, if anything, they can conclude from that, and from anything else they can gather. If there was in fact a leak of some sort, it may be a little like looking for a needle in a haystack (and it is hard to prove a negative, even if no leak occurred) and so it may be difficult from them to conclude anything very confidently one way or another.
I presume that, in due course, the Reserve Bank will release the results of its inquiry. Whatever it concludes about the specific event, the focus really should move quickly to reforming the procedures to materially reduce the risks of any leaks occurring.