Reserve Bank Governor Alan Bollard today announced he will not be seeking another term as Governor when his current term ends on 25 September this year.
Appointed in September 2002, Bollard is in his second five-year term.
Bollard said that he will be fully focused in his remaining eight months on the serious economic and financial challenges facing New Zealand.
“As I noted last week, the Bank is ready to respond to ongoing developments overseas, especially in Europe, the US and China, as well as domestically, particularly the Canterbury earthquakes. In addition, the Bank’s expanded prudential regulatory responsibilities mean we will continue to introduce new prudential requirements this year, especially in the insurance and non-bank sectors,” he said.
The Chair of the Reserve Bank Board, Arthur Grimes, said the Board will search in New Zealand and abroad to identify a successor to Bollard.
The Governor is appointed by the Minister of Finance on the recommendation of the Board.
15 Comments
He will be replaced by another dummy who thinks that by tweaking the OCR now and again he can cure the economic problems of NZ. Mind you for $500,000 p.a. I'd do the job and do no worse than Bollard. At least in 2007 I had read from various minor economic forecasters e.g. Steve Keen, Michael Hudson et. al. that the high levels of debt and the US sub-prime problem were going to cause a major economic crisis. Whereas Bollard and all his central banker mates, who were supposedly the financial Regulators, were telling everyone that it would be business as usual. For this major blunder Bollard was praised for saving the NZ economy by the MSM. However I don't think history will treat him so kindly, but it will be too late by then.
Bollard should have been fired in 2008 for getting the OCR completely wrong and leading the country a long way into its current quagmire.
He had done a poor job through 2003 and 2004 balancing where the OCR should be. He was far too low for too long then, and most people knew it. I recall lamenting the fact he was dropping rates again in 2003, and realised the only protection was to buy as much property as quickly as possible. Not unexpectedly the prices had doubled within about 2 years.
Bollard's legacy is one of arrogance, incompetence and recklessness - all of which he'd deny, but the fact NZ has fallen so far from Australia in the past decade is proof alone.
How could the OCR be left at record lows when house prices were rising 20%PA in 03 and 04?
How could the OCR be left at 8.25% when the economy was so clearly tanking throughout 2008 a year into a recession?
Bollard's legacy is not one of good management.
Good riddance to him
Chris_J - An excellent analysis of Bollards performance, and we paid him $5 million for his efforts. What are the odds of his successor doing anything different? All mainstream NZ economists are operating from an economic paradigm that is divorced from financial reality.
The Reserve Bank replacement for Bollard will need a background in that shadow area of finance/politics - like a Dominique Strauss Kahn. Whomever it is must be on familiar terms with the Federal Reserve Bank of New York and the ECB, as well as the US State Department and EU. Ideally, the candidate will be comfortable stepping into the role of bureaucrat/chancellor when successive governments in New Zealand resist Irish style austerity. Needless to say they would need to have once worked at Goldman Sachs.
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