I will offer some thoughts on the FSR itself tomorrow, but I had few quick reactions to the comments made at the press conference this morning about the MediaWorks OCR leak and related issues.
I had heard that the Reserve Bank had been considering backtracking on the discontinuation of lock-ups, and had in fact been consulting selected journalists on the conditions on which media lock-ups might be reinstated. That was confirmed by the Governor this morning.
Frankly, they seem all over the place. Less than a month ago, they announced the discontinuation of lock-ups. I thought that was the right decision at the time (and had called for it earlier). Presumably the Bank had carefully considered the various options open to it then, and decided on balance that (a) consultation with affected parties was not required, and (b) that it was not appropriate to continue with lock-ups. One wonders what has changed, apart perhaps from some aggrieved coverage from some members of the media. As the Governor pointed out, lock-ups are very unusual internationally. There might have been a case for them 20 or 30 years ago, when citizens and investors couldn’t just download the documents themselves, and were quite reliant on the media for initial reporting and interpretation. That is no longer so, and the security risks are higher than they were (as the Governor rightly noted, they can’t simply go on relying on trust). I would urge the Reserve Bank not to reverse itself again, but if they do reinstate lock-ups for a select few media representatives – whether relying on pen and paper, or totally physically secure environments – the costs of those privileged arrangements should be borne by the media organisations concerned.
The Governor was also asked why the exclusion of MediaWorks from Bank press conferences had been announced only last week, and not when the inquiry results were released on 14 April (a question I also raised last week). The Bank simply avoided answering that question. Simply telling us that this was the first press conference since 14 April told us nothing. If there were penalties to be imposed on MediaWorks (and exclusion seems sensible) why not announce them when the inquiry report was released – rather than use that opportunity to praise the helpfulness of MediaWorks legal team?. What has changed?
Mike Hannah also confirmed that the Bank has no information on whether there had been previous breaches of security, whether by MediaWorks or other lock-up participants. He stated not only that the Bank was not aware, but that it had not asked. That seems simply extraordinary, at least as regards MediaWorks. When MediaWorks approached the Bank and Deloitte on 5 April, surely a very early question – from either party – should have been “and has this happened before?” (along with “and who in the organization knew about it?”). It is a shame media did not pursue the matter further, but we are left with the suspicion that the Reserve Bank really did not want to know too much about what had gone on, and wanted the whole issue put behind it quickly. That should not be the standard to which powerful autonomous public agencies operate.