(and some questions as well).
I got home at lunchtime after a couple of hours out with the kids to find a very pleasant surprise.
Following the kerfuffle last week about the Reserve Bank’s leak inquiry, and the discontinuation of the Bank’s lock-ups for media and analysts, someone reminded me that not just Treasury but also Statistics New Zealand holds regular lock-ups involving market-sensitive macroeconomic information. Statistics New Zealand runs lock-ups
for media and market commentators for Gross Domestic Product, Balance of Payments and International Investment Position, Consumers Price Index, and Labour Market Statistics releases.
I wondered (a) what procedures Treasury and Statistics New Zealand used, and (b) whether either organisation had changed their procedures in light of the Reserve Bank’s leak inquiry and subsequent decision to discontinue lock-ups.
So last weekend I logged OIA requests with each organization, and assumed I’d hear something in a few weeks time.
But Statistics New Zealand responded this morning (in due course, their full response will be here). Often enough, blanket refusals take 20 working days or more, but here was a department offering a prompt, clear and helpful reply, and offering to answer any follow-up questions.
Here are the SNZ procedures
Prior to the commencement of a media conference, Statistics NZ requires attendees to sign in and surrender their cell phones. In addition, Statistics NZ displays the following media conference rules for attendees to abide by:
- the media conference is held as a ‘lock-up’
- once you have entered the room, you must not leave until 10:45am when the embargo is lifted
- please sign in, turn off your mobile phones, including smartphones, and put them in the compartment at the conference room entrance
- laptop external wireless communication devices must be placed beside the laptop on the media room table for the duration of the media conference, and cannot be connected to the computer until the embargo is lifted
- laptops or other devices that have internal wireless network capability must not connect or transmit until the embargo has been lifted
- we reserve the right to inspect devices to ensure that internal wireless capability is turned off.
Statistics NZ staff are happy to assist you with any questions about these guidelines.
Note: Before the media conference starts, attendees are permitted to call their office, from Statistics NZ provided phones, to set up redial capability for use at 10:45am.
And here is the response as to whether they have made any changes or reviewed their procedures
Statistics NZ has not undertaken any reviews or made any changes to the department’s policy for media conferences following the Official Cash Rate leak at the Reserve Bank of New Zealand and the subsequent Deloitte report into that leak released last week.
Unfortunately, Statistics New Zealand seems still to be relying, in effect, on trust (in much the same way the Reserve Bank was doing). But the headline statistics that they hold lock-ups for are highly market-sensitive, and will not infrequently move markets more than an OCR announcement will (as one would expect; it is the same data the Reserve Bank uses). There is no sign of, say, any jamming technology (or other technical means) being used, to buttress the role of trust.
Statistics New Zealand notes that
While Statistics NZ has never had a breach, if that trust is abused and an embargo is broken, offenders and their organisation would be barred from attending future media conferences.
Unfortunately, that was probably the sort of discipline/incentive the Reserve Bank was implicitly relying on as well.
As I’ve argued previously, the case for pre-release lock-ups for monetary policy announcements is weak (with the possible exception of a highly secure 10 minute lock-up for core financial journalists, with no additional briefings – something like the model the US Federal Reserve apparently uses). Is Statistics New Zealand that different? There is, obviously, no policy message SNZ is trying to put across with its releases, and so no risks of different messages getting to different people. But the security risks are the same. Perhaps it is simply more efficient to have everyone in the same room, to clarify key technical points, but couldn’t the same end be achieved – on a more competitively neutral basis (to analysts based abroad, say) – by a dial-in (even webcast) conference call held a bit later on the day of the release?
Anyway, the point of this post was to praise Statistics New Zealand for its timely (“as soon as reasonably practicable”) response to an OIA request. Quite what approach Statistics New Zealand should take in future is a matter for them, but I would encourage them to think again about the risks, and about alternative – perhaps preferable – models for helping to ensure that users can get whatever technical insight SNZ can offer into the numbers it releases. Breaches may never have happened, but when one does happen – and (by accident or intent) with current systems it must be a matter of time – it can suddenly get extremely uncomfortable.
UPDATE: For those with a taste for obscure historical episodes, chapter 1 of this document – linked to by a commenter – is well worth a read on the great data leak of 1905.