Adrian Orr's unconventional approach to running the Reserve Bank has come under criticism lately, but he's got the backing of one high-profile economist.
Orr's been proactive in implementing his agenda, making huge cuts to the official cash rate and taking on the Australian-owned banks' reluctance to hold onto large amounts of capital to protect against economic shocks. The Reserve Bank also took part in a review of life insurance companies which found they put far too much emphasis on profit over customers' interests.
But an opinion piece run by Stuff at the weekend stuck the knife in, saying he is "unrivalled among central bankers in the developed world for the tempestuous and personally directed venting of his views".
Business reporter Kate MacNamara said Orr has "penned his critics letters and threatened to broadcast them" and called people in "odd hours to tear a strip off them for their views".
Economist Cameron Bagrie told The AM Show on Monday it was worrying that people are starting to talk about Orr more than the Reserve Bank itself, or his decisions.
"We think about a central bank governor as being sort of deadly dull and boring - well I tell you what, Adrian is not deadly dull and boring. He's got a bit of character, and that's taken a little bit to get used to... This is not just the Adrian Orr show - the Reserve Bank has been a lot more proactive in regard to how they're setting monetary policy. They're going early as opposed to going late - that's a good thing. They're trying to buffer up the New Zealand economy.
"They've taken on a couple of pretty big sectors in the form of the banks and the insurance companies, they've identified conduct and culture as pretty big issues. They've got a proposal on the table for the banks to hold more capital."
Orr said while he agrees "with the spirit" of what the Reserve Bank is trying to do, he questions the execution, and whether Orr should perhaps tone it down and become a bit more like previous Governors Don Brash and Alan Bollard.
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The Reserve Bank slashed interest rates from 1.5 to 1 percent in August, which Bagrie said might have been a bit much, for example.
"Twenty-five would have been appropriate. They've spooked people by going 50."
Reserve Bank chairman Neil Quigley told Stuff they've not received a single complaint about Orr's behaviour.
"The board has full confidence in Adrian Orr's leadership."
Newshub.
