If there’s one good thing about how New Zealand does monetary policy, it’s that there is a less political nature in terms of central bank supervision.
I’m pleased that Rod Carr will be Chairman of the Reserve Bank of New Zealand. I thought he was in the running to be Governor but apparently he wanted to finish up his contract with UC.
The current drama in the United States over whether the next Fed chairman will be Janet Yellen or Larry Summers – both very political people affiliated with the Democrats – doesn’t happen here.
Dr Arthur Grimes has been a safe pair of hands for 11 years. The Reserve Bank of New Zealand is the “least bad” of all the central banks.
Dr Rod Carr is Vice-Chancellor of the University of Canterbury and has experience in business and banking. He was Deputy Governor of the Reserve Bank for a while and is in a good position to provide monetary policy oversight.
I am reliably informed that he has done pretty well keeping rebuilding and repair costs at the University of Canterbury from completely blowing out. Despite the massive deficits, most of that seems to be repair costs.
It is an inherently good thing that this transition – though it is the Chairmanship not the Governorship – has attracted very little media attention in New Zealand other than rewritten press releases.
The economics blogosphere can rest easy that John Key didn’t put someone without central banking experience in the supervisory role at a time when he seems intent on reducing the independence of our central bank and undermining the Governor’s authority.