Academic journal article The Reserve Bank of New Zealand Bulletin

Hon. Michael Cullen Broad Support for Svensson Review Changes to the Reserve Bank Act

Academic journal article The Reserve Bank of New Zealand Bulletin

Hon. Michael Cullen Broad Support for Svensson Review Changes to the Reserve Bank Act

Article excerpt

7 August 2001

Broad support for Svensson Review changes to RBA

"The Government has cross-party support for a series of minor changes to the Reserve Bank Act arising out of the Svensson Review of the Operation of Monetary Policy," Finance Minister Michael Cullen said today.

"I welcome that as political consensus and stability are important in this area," he said.

The proposed amendments were:

"the Bank's Board to be chaired by a non-executive director rather than the Reserve Bank Governor

"the chairperson to be appointed by the non-executive directors

"the Governor to remain a member of the Board but the two deputy governors to be removed.

Dr Cullen said the changes, which were supported by all parties in the House, would be included in the Reserve Bank Amendment Bill set down in the government's legislative programme for passage if possible this year.

"As I made clear in my initial response to the Review, the Governor will retain sole responsibility for monetary policy. But I believe there are benefits in exposing the Governor to a wider range of views when decisions are

taken and have invited the Bank to consider how this might be done.

"The Bank is currently advertising to appoint one or two part-time external advisers, chosen for their broad knowledge of the New Zealand economy, to provide input into the decision-making process. …

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