Jenee Tibshraeny: NZ Herald Wellington business editor on her first impressions of the new Reserve Bank Governor

The new Reserve Bank Governor, Anna Breman, hosted an event for media earlier, allowing financial journalists to get their first look.

Breman is monitoring the impact of tightening financial conditions, amid concerns about the state of the OCR.

NZ Herald Wellington business editor Jenee Tibshraeny explained further.

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Episode Transcript

Speaker 1 (00:00):
Bryan Bridge, let's go to Jena to training. Media got
their first chance to check out the new Reserve Bank
governor this morning. Arna Breman is her name hosted a
breakfast event for journalists and Janey was there. Jenay, good evening,
Hey Ryan, So what was it like? What was she like?

Speaker 2 (00:16):
Well, she's a serious operator from the Central Bank in Sweden.
The thing we were all really interested in today was
whether she would try to talk down the market so
people might be aware that wholesale interest rates have been
rising quite dramatically over the past fortnight since the Reserve

(00:36):
Bank cut the ocr and this prompted Westpac yesterday to
announce that it was actually increasing some of its longer
term mortgage and term deposit rates. So today I went
along to the breakfast and thinking it'd be lovely to
meet the new governor. But really what I really wanted
to know was was she okay with the way the
market was going or would she try to talk it down?
And she didn't try to talk it down. She's only

(00:58):
been in the job for ten days, but she did
not try to change the trajectory of those wholesale interest rates.

Speaker 1 (01:05):
She did say anything, you know, all options are still
are always on the table, though. Is that not going
far enough? You don't think no.

Speaker 2 (01:13):
So the market didn't really respond to her comments. So
what she said was fairly safe in the sense that
she said that you know, she was aware that financial
conditions were tightening and should keep an eye on the
data as it comes in. So it's quite a long
gap between now and when the Reserve Bank next reviews

(01:33):
the OCR. That'll be only on February eighteen, so she
did have an opportunity to talk it down. But you know,
I've just talked to a few people about this, and
you know, we're thinking, on the one hand, it would
be out of place perhaps if she did swoop on
in and talk the market around, especially because these days

(01:57):
it's a committee that sets the OCR, that sets moneth policy,
it's not just the governor. So she said she hadn't
even had a chance to meet all her fellow Monetary
Policy Committee members, so maybe it would have been out
of hand if she came in and took the market down.
On the other hand, the economy still needs support, according
to most commentators, so by having these mortgage rates go up,

(02:20):
that really potentially does slow our economic recovery.

Speaker 1 (02:24):
Yeah, I won't yet. No, it's definitely not a great headline,
is it if you're the Minister of finance. But I
wonder whether because yeah, you just come in, but also
with the market reaction, even if she had said something
which people might have got, Oh, she's talking it down.
She is, as you say, only one on the committee, right,
so she gets one vote, just like the rest of them.

Speaker 2 (02:45):
Yeah, exactly. So you know, back in the day, the
governor had all the power and that's not the case now.
So perhaps it's it is understandable, you know, but other
commentators are quite worried about where things are going. Westpac
is the only bank to have moved, but all the
banks steal in the same wholesale markets. So the funding
pressures that Westpack is under, the other banks are under

(03:06):
as well. The interesting thing now to look at is
to see, you know, which bank is next, and whether
there is some competitive tension. No doubt, the marketing departments
at the banks are talking to the you know, financial
nerds at the bank's trying to figure out, you know,
win might be the best time to announce their mortgage
rate hikes. It's not exactly a great headline, No, it's not.

Speaker 1 (03:27):
And as I said, especially if you're Niola Willison, she's
out there saying basically shop around, And I mean, you've
got to hope that the banks don't all put their
rates up, because then you're shopping around for the same rate.

Speaker 2 (03:38):
Well, you know, that's the thing. So these the wholesale rates,
which are the ones that largely affect the longer term
mortgage and term deposit rates, they are now about fifty
basis points higher than before the OCR cut. So the
result bank cut by twenty five points and the rates
are now about fifty points higher than before the cut.
So it's not only unwound the effect of the o

(04:00):
CR cut, but it's gone even further and that's in
the wholesale markets, which affect those long term rates. So, yes,
Nichola Willison, Christopher Luxen, who have been rarely milking the
whole interest rate cut situation and claiming, you know, claiming
it as a victory for themselves slightly wrongly. You know,
it's a debateable issue, but they're in a bit of

(04:21):
a tight spot now with the rates going up, and
definitely the last thing they need.

Speaker 1 (04:26):
Janet, appreciate your time this evening and your analysis is
always generative training. The Herald's Wellington Business editor, who was
at the media only breakfast this morning with the new
Zoo Bank Governor Arna Brennan. For more from Heather Duplassy
Allen Drive Listen live to news Talks. It'd be from
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