Its not a widely known fat, but its no secret either, that at the Reserve Bank of New Zealand the sole decision making power for monetary policy is the Governors.
It is the Governor with the sole decision making authority. This has been the case since 1989.
As an interesting sideline to the RBNZ announcement, news conference, and Governor Wheeler's appearance in parliament, Wheeler sought to clear up what he says is a misunderstanding on how decisions are made.
- Before the monetary policy statement there were "three days of very intensive discussions - probably with about 35 colleagues in the room"
- Forecasts, risks and an assessment of the external economy were considered
- Then simulations, testing the "what ifs"
Then ...
- There's a committee of 12 people (2 from outside the central bank who come in four times a year as part of the MPS process)
- These 12 give advice to the four RBNZ governors. (The four are Wheeler, deputy governors Grant Spencer and Geoff Bascand, and assistant governor John McDermott.)
"The four governors then make the decision," Wheeler said. "There's no example, at least in the past decade, of the governor not taking a decision consistent with the recommendation of the committee," he said.
