A proponent of transparency, she stressed that any changes to the way monetary policy decision-making was communicated should be made in a way that was suitable for New Zealand.<\/p>\n
Finance Minister Nicola Willis is open to considering publishing Monetary Policy Committee members\u2019 individual views.<\/p>\n
\u201cIn general, I\u2019m in favour of more accountability and transparency in the way the Monetary Policy Committee delivers its functions. I want to have the discussion on the specific question with the incoming Reserve Bank governor,\u201d Willis recently told the Herald. <\/p>\n
\u201cI think there are opportunities to revisit the Monetary Policy Charter.\u201d<\/p>\n
However, the Labour Party MPs who questioned Breman expressed hesitancy over this, noting that detailing the perspectives of all seven members of the committee could confuse the public and financial markets, and increase the likelihood of members being lobbied on how to vote.<\/p>\n
Speaking to the Herald last week, the Reserve Bank\u2019s outgoing interim Governor Christian Hawkesby said that the way the committee worked had evolved since its inception in 2018, with external members speaking more publicly, for example. <\/p>\n
He was wary that detailing individual members\u2019 views could be counter-productive, as it could encourage members to come to meetings ready to defend their views rather than being open-minded.<\/p>\n
Breman also provided safe answers when asked about money printing \u2013 something the Reserve Bank did during the pandemic, when it wanted to soothe dysfunction in the bond market and provide the economy with more stimulus than could be provided by cutting the OCR, which was already near zero and couldn\u2019t be taken in to negative territory for operational reasons.<\/p>\n
She took the same approach as the Reserve Bank, saying it was good to keep large-scale asset purchases (i.e. money printing) in the Reserve Bank\u2019s toolbox, but the OCR would be its primary tool. <\/p>\n
Breman said the bank had to \u201cbe careful\u201d when using this \u201cunusual tool\u201d.<\/p>\n
However, she made the point that all crises were different, and it was difficult to know what the next crisis, and most suitable response, would be.<\/p>\n
Breman and the Monetary Policy Committee will next review the OCR on February 18.<\/p>\n
In coming weeks, the bank will unveil changes to the amount and\/or type of capital it will require banks to hold.<\/p>\n
New chair good friends with the old chair<\/p>\n
While MPs on the Finance and Expenditure committee welcomed Breman, and tried to get a sense of where she stood on various economic issues, Labour\u2019s finance spokesperson Barbara Edmonds asked a few probing questions on the bank\u2019s handling of Adrian Orr\u2019s resignation as Governor in March.<\/p>\n
Finlay fielded these questions, having exercised the functions of chairman since August, when Neil Quigley resigned<\/a>. <\/p>\n Quigley came under pressure from Willis, as the Ombudsman compelled the Reserve Bank<\/a> to disclose more information about the circumstances around Orr\u2019s abrupt resignation.<\/p>\n As it turned out, Orr\u2019s resignation wasn\u2019t just his \u201cpersonal decision\u201d. Rather, the board presented him with a letter of concerns before he stepped back from the role and then quit.<\/p>\n While Willis was critical of the board, she last week announced Finlay would serve the rest of his current term, until June 30, 2027, as chairman. <\/p>\n Willis told the Herald, she had confidence in Finlay \u201cbecause he agrees with the need to lift the bank\u2019s performance and understands what is required to do that\u201d.<\/p>\n Finlay told the Finance and Expenditure committee that Quigley had been an \u201coutstanding\u201d chairman, a \u201cvery good friend\u201d and his decision to resign was his own. <\/p>\n Edmonds questioned whether good friendships got in the way of good judgement. Asked whether processes had been followed appropriately, Finlay responded, \u201cAbsolutely\u201d. <\/p>\n National MP Dan Bidois followed up, asking Finlay for assurance the board wasn\u2019t a victim of \u201cgroup think\u201d.<\/p>\n \u201cI don\u2019t see any group think. I see really strong debate,\u201d Finlay said.<\/p>\n He defended the board\u2019s decision to make an initial government funding bid of more than $1 billion for five years, only to settle for $776 million – a sum Orr deemed insufficient. <\/p>\n