Mystery surrounds Adrian Orr’s sudden departure from the Reserve Bank

Thursday, 6 March 2025

Reserve Bank Governor Adrian Orr has resigned suddenly, with no notice period, and no real explanation as to why. Orr has been in charge since 2018 and was only half-way through his second term at the helm.

Thursday was another day of non-answers, feeding the information void left in the wake of Adrian Orr’s sudden departure from the Reserve Bank.

The public still doesn’t know why the Reserve Bank governor quit on Wednesday, leaving by lunchtime without giving any further notice. But the search for his replacement is now on.

It’s an intense process, complicated by the Reserve Bank’s unique position in the role of government - to act independently from the Government.

Christian Hawkesby has been promoted from deputy to acting governor, until March 31.

After that, Finance Minister Nicola Willis is tasked with finding a temporary governor. The temporary governor can stay in the role for a maximum of six months.

Which means that a new governor should be ready to start their five-year tenure by October.

It is the job of the Reserve Bank board, not Willis, to find a new governor. That board is chaired by Professor Neil Quigley, who fronted for a 12-minute press conference on Wednesday that gave very little away as to why the governor had quit and wouldn’t be coming back.

Reserve Bank Governor Adrian Orr has resigned.

On Thursday, hoards of central bankers arrived in Wellington from across the globe. They’ve been invited by Orr for what he was promising would be “two days of cut and thrust excitement” - that being, a conference about monetary policy.

The conference started on Thursday morning with Ben Bernanke, who chaired the Federal Reserve through the 2007 - 2008 financial crisis, giving a keynote speech.

If any of the economists who’d gathered to hear Bernanke’s speech were looking for a top new job, they knew who to talk to. As chairman of the Reserve Bank board, Quigley is now leading the hunt for the central bank’s new governor.

The role of the Reserve Bank governor is one of the highest paid in public service. Orr made more than $850,000 each year.

The next steps

It’s a complex and drawn out process to appoint a Reserve Bank governor, with the law requiring consultation and multiple “recommendation” processes before one can be appointed. It’s designed this way to ensure the independence of the Reserve Bank.

Technically, the governor of the Reserve Bank is appointed by the Governor General.

The Reserve Bank board will conduct a global talent search, and then make a recommendation to the finance minister.

She then needs to consult every political party in Parliament about the front runner.

After that, she can then agree with the recommendation and forward it on to the governor-general.

Asked about the appointment process on Thursday, Willis said she expected the Reserve Bank to be working towards that October deadline.

“Although an extension is possible,” she noted.

Finance Minister Nicola Willis says the Reserve Bank can cut costs.

“There’s a really clear statutory process. So by the end of this month the reserve bank will have recommended to me a temporary appointment up to six months,” she said.

Still no clarity - but funding a clear issue for the Reserve Bank

Quigley, on Wednesday, said there were a few “issues” Orr was having in his role as governor, which sees him lead the Reserve Bank.

While Willis and the coalition Government have been putting pressure on ministries to cut costs, the Reserve Bank had so far been immune - thanks to the way it is funded.

But Orr and Willis had been negotiating the bank’s future funding, and Willis confirmed to reporters on Thursday that she had been clear about her desire to see it reduce spending.

Under Orr’s leadership, the Reserve Bank had tripled its workforce.

“The Reserve Bank has had an extraordinary increase in funding in the recent years, far beyond that of many government agencies. And I think the reserve bank should be held to the same levels of value for money and restraint as any other government agency,” she said.

Asked if disagreements about funding had led to Orr’s resignation, Willis wouldn’t comment.

“I’ve said to you, the reasons for Adrian’s resignation are his own. I can't get inside his head and explain them to you,” she said.

Quigley didn’t share much light into the mind of Orr on Wednesday. But he did say the stress of the role was significant.

“I think you have to remember that the job of the Reserve Bank Governor is one where you face unrelenting critique of your actions,” he said

Orr has not responded to requests for comment.