Selva Baziki: Swedish economist on the appointment of Anna Breman as Reserve Bank Governor

Our next Reserve Bank Governor is being commended for her track record in Sweden. 

Dr Anna Breman —the First Deputy-Governor of Sweden’s central bank— will lead our central bank from December. 

Swedish economist Selva Baziki says the Swedish economy is similar to New Zealand's. 

And she told Mike Hosking Breman and her colleagues successfully reined in inflation without too much economic impact. 

Baziki says they've done quite well in the tough job of balancing growth and employment with inflation. 

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Episode Transcript

Speaker 1 (00:00):
So the new Reserve Bank governor is doctor Anna Brahman
out of Sweden, only the second time we've had someone
from off shore. Of course three hundred candidates in the field.
She comes to us from the RIX Bank, which is
where she's been. The deputy governor, Selva Berziki is the
Swedish economist for Bloomberg Economic serenders with us on this
sober morning.

Speaker 2 (00:16):
Hi, good morning.

Speaker 1 (00:18):
The role of the RIX Bank in terms of handling
of COVID and whether it is perceived to have handled
things generally well during that period.

Speaker 2 (00:28):
Yep, that's right.

Speaker 1 (00:29):
And have they Is it perceived in Sweden as having
handled that particular period well?

Speaker 2 (00:36):
I think it's of course, looking back twenty twenty vision
it's you can always find items of diversity of discussion
and criticism. I think that all the economies at the
time were faced with high inflation coming from supply side shocks,

(00:56):
and a lot of the times countries like Sweden all
upon economy, just like in New Zealand, I think we
were faced with a lot of headwind that we weren't
accustomed to in that kind of setting. Then having a
mandate that has the central bank targeting inflation law and

(01:17):
stable inflation. It becomes a tough choice then for the
policymaker to handle the growth and labor side effects versus
the inflation. So I think in that regard they've done
they've done a they've done a quite well job.

Speaker 1 (01:32):
She is an academic economist, and part of the issue
we would argue here is they've misread what we would
call the real world. In other words, they're too busy
sitting in meetings and offices and not you know, taking
the true vibe of the economy. Is that an issue
or has been an issue for the Reserve Bank in
Sweden as well or not?

Speaker 2 (01:51):
In Sweden, industry transmission is very very fast because borrowing
costs a quite short term, rather flexible, especially the kind
of boring costs that matters for the household the long
term mortgage rates. So in that way, having any decision
that they've taken in terms of either the raids decision
or the guidance that they provide has transmitted quite fast

(02:15):
and through to the economy. Now in there our in
house scoring of Brayman's tenure as the first Deputy governor
at the ricks Bank, she's quite balanced and very inflation
focused and she considers domestic and international factors thoroughly in
her arguments, so that's going to show her quite well
as she moves to another small economy. But relative to

(02:38):
other executive board members at the ricks Bank, we rank
her as leaning slightly douvish, meaning she is, you know,
first and foremost targeting inflation, of course, but it's seemingly
favoring growth concerns a little bit more than the other members.
Just an example, she was one of the few dissenters

(02:59):
in favor of a smaller hike in twenty twenty three.
Now at the time, inflation was running at multiples of
the two percent target, and she said, well, no, the
team longer term outlook actually should prevent us from going
hard on that hike. So in that way, I think
she's going to be a quite well balanced person to

(03:22):
have at the HELM.

Speaker 1 (03:23):
Great insight. Self appreciate it very much. Solva Boziki, who's
the Sweden economist for the Bloomberg Economics, I seemed like
a likable, approachable person and I take great hope from
the fact that yesterday, as I said, I think yesterday
on the program that we can attract international talent from
offshore still to the country, which says something about us reputationally,
which is good for more from the Mic Asking Breakfast,

(03:45):
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