Gift receiving at the Reserve Bank

I was following up something this afternoon, and noticed that the Reserve Bank had posted an OIA response to someone inquiring about gifts accepted by staff.

There is almost two years of data, and the overall list isn’t that long.   I’ve been the recipient of all sorts of, mostly small, things over the years –  often from visiting central bankers or the like, but including the odd corporate box invite, dinners, and so on.   If anything, I’m a little surprised the Reserve Bank’s list isn’t longer –  in my days in the Financial Markets Department, corporate hospitality was part of relationship management, particular for our dealers.   The Bank must have tightened up: there is a surprisingly small number of cases of financial markets staff accepting hospitality etc.

But one element of the list really did catch my eye.  The Reserve Bank supervises banks, non-bank deposit-takers, and insurers: in doing so, it can have a big influence on the businesss of those institutions.    So one of the things that is very important is that the Reserve Bank’s supervisory staff keep a suitable distance from the institutions they are regulating.

On the gifts list, three banks operating in New Zealand showed up.  The first was BNZ, offering hospitality (twice) to Mark Perry, the Reserve Bank head of financial markets (and a former BNZ employee).   Mark won’t be involved in the supervisory or regulatory side of things.  The second was Bank Baroda, which presented a couple of books, which were passed on to the Reserve Bank library.

The bank that showed up most was ICBC.  It showed up seven times, on each occasion offering gifts to people with a direct involvement in bank regulation.   These ranged from a wall-hanging presented to the Governor by the bank chairman from China (not kept personally by the Governor), through to a box of food, cheese boards given to four staff, three note pads and a wireless mouse, a mobile power pack (again not kept by the individual) at the end of a supervisory meeting, and another wall-hanging presented to the Deputy Governor (not kept by him personally) by “ICBC Mr Wang Lin, Secretary of Party Discipline Committee”.

There was also another gift, accepted by the relevant staff, from a foreign bank at a meeting to discuss a possible application for bank registration.

I am not, repeat not, suggesting that any Reserve Bank official will have directly changed their stance on any matter to do with ICBC because of these fairly small gifts.  But appearances matter, and so does substance.   It is simply inappropriate for Reserve Bank staff to be accepting gifts from banks they regulate, no matter how small those gifts are.  Taken together such small gifts can foster an atmosphere that makes the regulator a little less willing to ask hard questions, or to confront problems, than they might need to be.

The Reserve Bank’s rules need to be tightened up and the banks concerned need to be reminded –  in the Governor’s words –  that these are New Zealand registered banks, no matter which country the bank concerned’s shareholders and owners happen to be based in.   Regulators simply shouldn’t be taking gifts from the regulated, not even as a matter of “courtesy”.



5 thoughts on “Gift receiving at the Reserve Bank

  1. A mouse? What an odd choice of gift.

    Almost certainly bugged (I’ve seen that sort of thing first hand) – I hope it was suitability euthanised.

    Liked by 1 person

  2. Yes, I would check every item, not just the mouse, very thoroughly for surveillance devices, which can be small and unobtrusive these days.


  3. The Reserve Bank certainly does wield enormous power over banks and and Australian banks certainly do wield significant influence over RB officials due to the regular contact that they have at various bank funded functions. The large Chinese banks that operate in NZ are like embarrassing little banks when compared with the monopoly that the Australian banks have thereby keeping interest rates higher than it needs to be at the cost of New Zealanders and NZ businesses with yearly record profits shipped to Australia.

    This is due to the RB licensing restriction that require a significant lending percentage to be measured against local savings which the Chinese banks do not have. Recently, this licensing restriction was relaxed for the China Construction bank likely to assist in infrastructure lending but this has not spread out towards residential lending nor spread out to the other Chinese banks. This effectively means that the large chinese banks cannot lend against their parents balance sheet but are severely restricted to the capital injected into these local subsidiaries which is no more than several hundred million compared with around $400 billion in residential and commercial lending in NZ held significantly by the monopoly Australian banks.

    The Commerce Commission is plainly sleeping at the wheel. Perhaps it is the Commerce Commission that should be declaring their gifts?


    • Or perhaps the RBNZ is complicit in the sort of monopoly behaviour exhibited by our monopoly Australian banks. The Australian regulatory officials and the Australian public certainly do think so, quite different from the lame duck approach that our RBNZ has taken.


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