NZ Super Fund chief executive Adrian Orr named new Reserve Bank governor

Monday, 11 December 2017

Super Fund chief executive Adrian Orr has been named the new Reserve Bank governor.

Prime Minister Jacinda Ardern announced the appointment on Monday. Orr will begin on 27 March 2018, once acting governor Grant Spencer finishes his tenure.

Orr has previously served as the deputy governor of the Reserve Bank, leaving to head the Super Fund a decade ago. He has long been considered a potential governor and emerged as the favourite earlier this year.

The job comes with considerable power over interest rates and bank lending. The new Labour-led Government has signalled a review of the way the bank operates, which could diminish the power of the governor at least slightly.

Former Governor Graeme Wheeler stood down in September. The former National-led Government agreed to delay the appointment of a new governor until after the new government was formed, putting spencer in the role for six months.

Finance Minister Grant Robertson said Orr was the unanimous choice of the Reserve Bank board.

'I'm delighted the Board has been able to secure a Governor with such a strong track record of delivery and public service. Mr Orr has the technical and leadership qualities required to be Governor and CEO of the Reserve Bank. Further, I consider that he has the skills necessary to successfully lead the Bank through a period of change.'

Robertson told reporters it was 'an appointment that will be welcomed right across the financial sector'.

'We're delighted about the appointment and if the markets are pleased that's a great thing too.'

Orr hit headlines earlier this year when it emerged the Super Fund's board had hiked his pay against the recommendation of Bill English, who said he would criticise the move publicly.

Robertson said Orr will take a considerable pay cut switching jobs.

A spokeswoman for the fund said Orr was unavailable for interview. In a statement announcing his coming departure, Orr said he had 'been immensely privileged to be employed as the CEO of the NZ Super Fund.'

Likewise, I am honoured to assume the role of Governor of the [Reserve Bank] next year.'

The New Zealand dollar jumped on the news, climbing around half a cent to just under US69c.

ANZ chief economist Sharon Zollner said it was difficult to think of a better qualified candidate than Orr.

'A very safe pair of hands. I worked with him for years at the Reserve Bank and he's a fantastic communicator and that obviously a key part of the role,' Zollner said. 'He's extremely well qualified for the role. It's difficult to think of anyone who is more qualified.'

While a number of the Reserve Bank's top officials were considered possible candidates for the job - deputy governor Geoff Bascand had publicly confirmed he wanted the job - Finance Ministers have tended to appoint external candidates.

Robertson has signalled significant changes for the Reserve Bank, including broadening its targets and having outside officials contribute to interest rate decisions - which made an external appointment even more likely.