Jenee Tibshraeny: NZ Herald Wellington business editor on Adrian Orr's abrupt resignation from the Reserve Bank

Major question marks over the shock-resignation of Reserve Bank Governor Adrian Orr.

Orr's laid out areas of his work he's proud of, but gave no reason for quitting almost half-way through his second, five-year term.

NZ Herald Wellington business editor Jenee Tibshraeny unpacked the reactions to this announcement.

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Episode Transcript

Speaker 1 (00:01):
You're on news talks herebit it's fourteen after six. We
tried to get to Adrian or today he's resigned. If
you're just joining us suddenly. No one knows why we
tried to get to him today. We asked the Reserve
Bank of New Zealand's media team if he could come
on the program. We heard nothing back from him. We called,
we text Nada, crickets the rumor mill now turning. Of course,

(00:21):
no definitive reason was given for this departure. Dnay Chips
Trainey is the Herald Wellington business reporter who's with us
this evening. Hi Janee, Hi Ryan. Gosh, this was one
out of the blue.

Speaker 2 (00:32):
It was I actually thought when my colleague Thomas Coglan
told me, I thought he was joking in the office
this afternoon just to evoke a reaction from me. It
was definitely a surprise. Now, tensions have been high between
adrianaw and Nikola Willis, and that is perhaps my best
scarceys to what's happened here. My guess, and this is

(00:55):
not just my guess, is that things might have hit
breaking point. Now. There are a couple of things that
have been happening. Firstly, the Reserve Bank has been asking
the government for more funding. It's received a lot more
funding in recent years because the sort of work that
it's been doing has expanded, particularly in terms of the
way it regulates banks and insurers. So that's one thing.

(01:18):
Nikola Willis has talked to The Herald last weekend and
basically said that she thought the Reserve banks requests weren't
reasonable and really emphasized the fact that the government's actually
trying to cut the amount of money at spending. So
that is one issue. Another issue is the way the
Reserve Bank goes about regulating banks. There are these bank

(01:40):
capital rules that we've been talking about for a number
of years that are there to protect banks and prevent
them from collapsing. Nicola Willis has been looking at whether
those could be watered down. That's something the banks would like,
and that is something that some people think would support
more competition in the banking sector. So I think those
are two issues of contention and that they might have

(02:03):
contributed to this decision. That is only that is only
a guess.

Speaker 1 (02:08):
I think you're onto something with the funding for the
Reserve Bank itself, and I when you look at the
staff numbers, somebody's just texted, have you guys mentioned the
number of staff working at the Reserve Bank years? Yeah,
and we did mention that earlier in the show, but
just for those who aren't aware, in twenty eighteen, two
hundred and fifty five full time equivalent employees, now six hundred.

(02:29):
Do you know there are reasons why that number has increased.
You know that they are doing different things, but is
that justified six hundred?

Speaker 2 (02:38):
Yeah, I mean it does. It's a lot, and it's
hard to know, and I think it's a tough pool
to swallow when one of the key jobs keeping inflation
in check is something the Reserve Bank has failed at,
Like inflation was above the target range for three years,
have got as high as and your rate god as
high as I think was just over seven percent. So

(03:00):
you know that that is tough when you go, well,
what's what's one of your key jobs and you didn't
do it properly. Now a few of the other things though,
that the bank is doing. One of the big things
is it's working on standing up this deposit compensation scheme.
So that's a whole new insurance scheme that means if
your bank collapses, you get some of your money back. Currently,
if your bank collapses or you or even your credit

(03:21):
union or other non bank deposit taker, you won't necessarily
get your money back. So there's that's a huge piece
of work to create this insurance scheme around that. So
that is, for example, something that Adrian or would point
to and say that this is a this is a
big deal and we need more stuff for that.

Speaker 1 (03:39):
Yeah to you know, I guess, Look, Wellington's a small place.
We're all going to find out eventually what happened, don't we.

Speaker 2 (03:44):
We do see Adriana or walking around the streets and
he will be asked. I mean, the timing of this
is also unusual. It feels like it caught it caught
aronoff guard. The Reserve Bank called a last minute press
conference at five o'clock today where the board chair spoke
to us again didn't provide too much more insight, but
suggested that my theories, you know, might be correct. The

(04:07):
other awkward thing is that the Reserve Bank is hosting
this massive international conference tomorrow and on Friday, So we've
got central bankers from around the world coming to Wellington,
including you know, high profile people like the former Federal
Reserve Chair ben benenk Catherine Man. You know, we're celebrating
thirty five years of inflation targeting. The Reserve Bank of

(04:29):
New Zealand is traditionally well respected around the world because
we helped pioneer the approach that central banks take today.
So to come out with this, and Nikola Willis said
it was Adriana's choice to come out with this the
day before this conference, which is a big deal, is interesting.
The other interesting thing is that the Reserve Bank said
I couldn't attend the conference in person because there was

(04:51):
not enough room and it's being live streams, so make
of that what you will.

Speaker 1 (04:56):
So Adrian's not going to it.

Speaker 2 (05:00):
Not going to it.

Speaker 1 (05:00):
No, So he's thrown his toys in a massive way.
He's he's having a massive wobbley. That's my that's my opinion.
I'm not asking for a response from you, Hot takes,
Hot takes.

Speaker 2 (05:13):
This is that you know, this is the thing and
in the absence of a of a reason of you know,
the Reserve Bank coming forward and Adrian or fronting and
this is what this is what happens. We fill the void.

Speaker 1 (05:23):
Yeah, well consider it fell Donat ship Trainey in Zid
hero At Wellington Business Supporter. Thanks so much for your time.
It is nineteen minutes after six. What else do you
read but massive wobbly from petulant child who didn't get
what he wanted in the budgets for nine two the
number to text nineteen after six will take a look

(05:43):
at reporting season. Obviously we've been reporting on reporting season
for the last couple of weeks. What does it mean
for New Zealand Inc? What does it mean for the
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