A reader mentions news that Reserve Bank Governor Adrian Orr was in typically loquacious form at a finance industry “networking event” held in Wellington last night.
Typically loquacious but, so the report suggests, perhaps going rather beyond the Bank’s public lines on monetary policy as articulated in the August Monetary Policy Statement, in a very dovish direction. And weighing in on what sort of person he wanted (and did not want – economists apparently not wanted) on the new Monetary Policy Committee – the one where the Minister supposedly makes the appointment, the one where the legislation has not yet been dealt with by the relevant select committee.
Central bankers need to be very cautious in their communications around monetary policy. The standard approach has been to communicate primarily via Monetary Policy Statements, where everyone has access to the same information (although I gather the Bank still holds confidential debriefs for bank economists as a group after each release, and if that isn’t potentially market sensitive it is hard to imagine what would be). That approach is sometimes supplemented with speeches: on-the-record ones where there is anything at all interesting, important, or potentially sensitive being said, and off-the-record ones where it is just repeating the same lines previously made public.
The speeches themselves are not without their problems as the Reserve Bank of New Zealand handles things. For instance, although the Governor has been in the role for five months now, there has been no on-the-record speech at all. And even when Governors have spoken in the past, there is often considerable potential for nuance or shades of information in the Q&A sessions afterwards. At the Reserve Bank of Australia, it is common practice for those Q&A sessions to be recorded and made available on the RBA website. There is nothing comparable here, and the Bank has often refused to allow media access to events where the Governor – a senior public official – is speaking. If you are lucky enough to be there you get information that the market as a whole doesn’t have. That simply shouldn’t be acceptable.
Perhaps some journalists might like to find out from participants, or from the Governor, what he actually said last night, complete with (potentially market-moving) nuances. Any other readers who were there who want to flesh out the account I’ve heard feel free to get in touch or comment (anonymously if you like) below.
But as it was relayed to me, it doesn’t sound like the sort of approach we should expect from any serious person holding a major public role.