Reserve Bank assistant governors quit amid restructure, as Nicola Willis limits bank’s funding boost
Simone Robbers is the third executive to leave the Reserve Bank in six weeks. Photo / Greg Bowker
The Reserve Bank of New Zealand is losing two assistant governors following Adrian Orr’s resignation as governor, amid a restructuring of its executive leadership team.
The bank (RBNZ) on Thursday announced its general manager of strategy, engagement and sustainability, Simone Robbers, would leave in May after six years in the role.
Robbers’ move follows Finance Minister Nicola Willis’ decision not to give the RBNZ the funding boost it wanted, as Treasury said several of the bank’s “non-legislative functions” appeared overstaffed.
Treasury singled out the RBNZ’s people and communications departments – the latter of which Robbers oversees.
Her resignation follows the departure of the bank’s general manager of information, data and analytics, Kate Kolich, at the end of March.
Kolich’s resignation was unveiled less than a week after Orr resigned on March 5.
Orr is yet to explain his sudden exit, announced as he was due to host prominent economists from around the world for a conference the RBNZ put on.
He left as negotiations were under way over the amount of government funding the RBNZ would receive over five years starting July 1.
In September, the RBNZ bid for more than $1 billion. Treasury advised Willis the proposal didn’t provide good value for money.
Then in March – nine days after Orr resigned – the RBNZ submitted a more modest proposal of $786 million.
On Wednesday, Willis confirmed the RBNZ’s five-year funding package would total nearly $776m - 8% more than the funding it received in the past five years.
RBNZ board chair Neil Quigley said the organisation would need to look closely at its spending, including on personnel.
On Thursday, the RBNZ confirmed it was consulting on a proposed new structure for its executive leadership team.
“No decisions have been made around a future structure,” it said.
Several leadership roles, including assistant governor positions, were created under Orr, with the oversight of Quigley.
The number of full-time equivalent staff employed by the bank increased from 255 people in 2017-18 to 660 by January this year.
The RBNZ’s responsibilities expanded over this time, as the Government modernised the legislation it operates under. For example, the bank is standing up a big deposit compensation scheme in coming months and regulating deposit-takers more tightly.
The RBNZ declined the Herald’s request to proactively release its funding pitch to the Government.
This would likely provide more insight into why it believed it shouldn’t endure the same sorts of job cuts occurring across the public sector – as well as the private sector, ironically, in part due to the recession the RBNZ engineered to curb the high inflation it helped create.
The RBNZ might argue it needs resources to deal with increasingly sophisticated cyber attacks, more severe weather events that affect the banks and insurers it regulates, an uptick in the use of digital currencies, and a desire for financial technology firms to be empowered to upscale to better compete with banks.
The RBNZ might also note it’s been through an unprecedented period.
It used new tools (which come with their own risks and complications) to lower interest rates during the pandemic, then contended with supply shocks and high inflation, and is now facing a trade war that’s causing extreme volatility in financial markets and creating uncertainty around the inflation outlook.
Coming back to the resignations, the RBNZ thanked Robbers and Kolich for their work.
Robbers said, “I fully support the RBNZ’s direction of travel under Christian Hawkesby’s leadership as governor, but the time is right for me to explore other opportunities.”
Kolich said she wanted to explore other career options within the digital, data and governance landscape.
Jenee Tibshraeny is the Herald’s Wellington business editor, based in the parliamentary press gallery. She specialises in Government and Reserve Bank policymaking, economics and banking.