RBNZ to set up Monetary Policy Committee
The Reserve Bank of New Zealand is planning to create Monetary Policy Committee, although the final responsibility for decisions on the official cash rate OCR will still rest with the RBNZ's governor, Graeme Wheeler, personally.The planned change in the bank's OCR decision making structure was revealed in the bank's Statement of Intent for 2013 to 2016, the first issued under Wheeler since his appointment in September last year.New Zealand is unique among central banks in that the Governor is the sole decision maker. Opposition parties have called over the last year for the OCR decision to be put in the hands of a committee or the bank's board, as is the case with other central banks. They have also called for exporters and manufacturers to be involved in the decision.The change was detailed in the SOI's first priority, which the bank said was "Strengthening the support for decision making at the bank."The bank said a committee comprising Wheeler as Chairman and his deputy governors, Grant Spencer, Geoff Bascand and John McDermott had been established to assist the Governor in all his decisions on monetary, regulatory and financial policy."The rationale for the committee lies in the broad range of responsibilities of the Bank, the extensive work programme under way on financial stability, the benefits of decision making through a committee structure, and the use of similar decision making bodies in several central banks," the bank said, adding the governor was responsible and accountable for all decisions made by the committee.The bank said three new members would join the current Official Cash Rate Advisory Group, which would be renamed the Monetary Policy Committee. The bank did not specify if the new members would be from within the bank, or be appointed from outside the bank.