WELLINGTON: Reserve Bank of New Zealand (RBNZ) Governor Alan Bollard will step down after a decade in the top job when his second five-year term ends on Sept. 25, and the central bank said it will look at home and abroad for a successor.
Bollard, the 10th governor of the central bank since its establishment in 1934, said in a statement on Monday 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," he said.
"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."
Markets showed little reaction. The New Zealand dollar , one of the best-performing currencies so far this year thanks to strong dairy prices and a weak US dollar, was unmoved around $0.8235 after the announcement.
Analysts said potential candidates to replace Bollard included Adrian Orr, a former deputy governor of RBNZ and current head of New Zealand Superannuation Fund, and current deputy governor Grant Spencer.
The governor is appointed for a five-year term by the Finance Minister on the recommendation of the RBNZ board, who will canvass local and international candidates.
PRAGMATIC
Bollard, 61, with a dry wit and an endless repertoire of proverbs in news conferences, has led the bank through the global financial crisis and the devastating earthquake in Christchurch in 2011.
"It's a long period of time, 10 years. A lot happened and he would have made some mistakes along the way but equally has managed through the crises fairly well," said Bank of New Zealand economist Doug Steel.
"It's hard to know what would have been an alternative in some ways."
Bollard, a competition regulator and head of the Treasury before becoming a central banker, has a penchant for designing jewellery and the central bank's Christmas cards.
He has always been regarded as more pragmatic and less doctrinaire than his predecessor Don Brash, who in 14 years as governor became known as one of the world's leading inflation busters.
Under Bollard the official cash rate (OCR) hit a record high 8.25 percent in 2007 to contain rising inflation because of a housing boom, and a record low of 2.5 percent to support the economy during the global crisis and after the earthquake.
During his tenure, the annual inflation rate has ranged between 1.5 percent in June 2003 and a high of 5.3 percent in June 2010, when a rise in sales tax boosted prices.
Bollard also largely resisted calls to intervene to lower the New Zealand dollar, maintaining it was a weapon to be used sparingly at times when it might have a chance of succeeding.
Only once while he was governor, in June 2007, did the RBNZ act in the market to attempt to slow the kiwi's stellar rise.
He has overseen a makeover of banking regulation, which has seen the mainly Australian-owned banking sector having to hold higher levels of capital, greater disclosure, and ensuring the ring-fencing of local operations.
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