Foreigner shouldn't replace Bollard, says Brash
Tuesday 31 Jan 2012 8:29 a.m.
Brash says bringing in a total stranger to NZ would be a bad mistake after Bollard leaves the Reserve Bank later this year
Recruiting a foreigner to replace Reserve Bank governor Alan Bollard would be a mistake, his predecessor says.
Don Brash thinks it would be very difficult for someone from overseas to do the job because they wouldn't know enough about the way the economy works.
Dr Bollard announced on Monday he would leave the role in September after holding it for 10 years.
The bank's board says it's going to start an international search to find a replacement.
"I think bringing in a total stranger to New Zealand would be a bad mistake," says Dr Brash.
"It would be very difficult for someone who hasn't spent a number of years in New Zealand to do the job adequately."
The appointment is made by the government on the board's recommendation and speculation has started about its choices.
Deputy governor Grant Spencer and former deputy governor Murray Sherwin are being reported as likely frontrunners for the role.
Economic analysts think the changeover could be the catalyst for changing monetary policy and widening the governor's role beyond controlling inflation through interest rates, so economic growth and employment are also part of the job.
Dr Brash says all the governor should do is control inflation.
"We've learned the hard way that the Reserve Bank should focus its monetary policy instrument on keeping inflation under control. That's been the case since 1989 and it's worked very well," he said on Radio New Zealand.