Wheeler and Hannah on the OCR leak

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.

6 thoughts on “Wheeler and Hannah on the OCR leak

    • Why – very valid concerns – it is still gobsmacking that an OCR cut was leaked and the potential damage to NZ’s financial reputation was massive but no massive fallout?

      Could you imagine what would have occurred if this had happened with the RBA, BOE or Fed?


  1. I watched the press conference this morning and took away the following points:

    1. Govt Wheeler does not appear comfortable in the discussions- just watch his hands move when he is speaking.
    2. My takeaway on potential measures to be introduced is that it’s still unclear. Surely they have Media training so that they appear clear and unequivocal in their mindset. Markets do not like uncertainty.
    3. This was an opportunity to jawbone the markets in the direction they wish the dollar to take and they did not really grasp at the opportunity.

    All in all, it makes you question their communication strategy/ability.

    Watching these conferences and reading the speeches, it is clear that the RBNZ has difficulties in communicating it’s wishes to the market (maybe because they are unclear themselves). I just recall the speech in late Jan/Feb (?) where Mr Wheeler flicks back at all his critics and indicates that no rate cut is on the immediate horizon and then cuts at the next OCR?

    Let’s see what happens with June’s OCR – my guess is that they will cut, Gov Wheeler will speak and the dollar will then rally!


  2. Strictly speaking you’re right when you say that “As the Governor pointed out, lock-ups are very unusual internationally”. But there’s quality as well as quality, and of the three that do have lock-ups, if I heard the Governor correctly, two are the Fed and the Bank of England, and I’d suggest if they’re happy, it’s good enough for us, too.
    We’re probably not going to have any great rapprochement on the desirability of lock-ups -I like them, you don’t – but just for the record I still think there’s democratic value in the press being able to question powerful figures on more equal terms than having to respond in haste to something the authorities have had time to position the way they’d like.
    FWIW I’m also baffled by why the question of potential previous breaches was not pursued.


  3. I’m not sure about the BOE position – I had understood they were only for Inflation Reports not actual interest rate decisions – but some serious concerns about the limited (and media only) Fed ones were raised in the recent Fed Inspector General report, incl mention of an actual leak.

    I’m not sure lock-ups achieve what you are looking for on scrutiny (with which I have no problem per se) since the Governor doesn’t usually go to lockups. There are other opportunities for those quiet conversations – eg the media lunches/breakfasts the Bank holds from time to time. And I’m sure media would welcome the occasional background interview with the Governor – as well as some on the record ones.


  4. Lets face it Wheeler is a doddery twit bordering on senility.
    As a leader he is bloody hopeless.
    Completely incapable of having a clear forward view and any plan. Just look at the rhetoric today about income ratio’s, LVR’s etc.etc.

    Better he shut up than continued to look .like a clown.
    Better he quit before he stuffs all of us.


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