- - - - - - - - - - - - -

Tuesday, June 26, 2012

New Governor

With the law putting their visible hands on the money supply and the interest rates they arguably have more power than the PM - the title of Governor is well used.

NZ Herald:

Finance Minister Bill English has announced that Graeme Wheeler will replace Alan Bollard as the new Reserve Bank Governor later this year.
Wheeler was employed by the World Bank from 1997 to 2010, his most recent roles included managing director operations from 2006-2010, and vice-president and treasurer from 2001 to 2006.

He was previously at the New Zealand Treasury as deputy secretary and treasurer of the Debt Management Office.

Wheeler is a New Zealander but currently lives in the United States where he runs his own advisory business.

Well at least they didn't appoint Don Brash! Wheeler seems uber-qualified for the job, having followed an orthodox career path in banking. We shouldn't expect anything "outside-of-the-box" from this chap obviously . As one of the most senior officers at the Washington DC-based World Bank he has been responsible for maintaining the box.

Here's an old image demonstrating Brash v Bollard on the target inflation rate. With the slump over the last four years inflation has fallen away and I expect Bollard's average will end up close to Brash's austere record.

This is the primary - and basically the only - way in which the Governor is measured in job performance. Please note we don't have a target: interest rate, balance of payments, debt etc. only price stability, ie. inflation. This is very narrow compared with other central banks where employment and other factors are also targets.

Oh, and a new signature on the banknotes too in due course, but that will likely be the only noticeable change.


At 26/6/12 6:38 pm, Blogger Nitrium said...

Price stability is by far and away the most important role of a central bank(ster). Remember that inflation is a stealth tax on EVERYONE, that especially harms the poor. The only acceptable inflation target is ZERO percent. If this new bankster refuses provably bullshit MMT garbage such as QE, I will be happy.


Post a Comment

<< Home