The Reserve Bank governor and the Koru Lounge feud.
Opinion: An airport-terminal clash led to a bitter dispute between the Reserve Bank governor and one of NZ’s largest think tanks.
The governor of the Reserve Bank upbraided the head of one of New Zealand’s largest think tanks last year in a clash that included claims by the governor of ‘‘ongoing character assassination’’ and a refused apology.
Governor Adrian Orr berated New Zealand Initiative chairman Roger Partridge by email for grievances including ‘‘stating I have a gambling problem’’, and for ‘‘mocking [the Reserve Bank’s] use of a Ma¯ ori mythology’’.
In a meeting of happenstance in the Koru Lounge at Wellington Airport and again at Auckland Airport following a flight, Orr also volubly complained to NZ Initiative executive director Oliver Hartwich.
Hartwich described Orr as ‘‘agitated and clearly unhappy. He made his position very clear, he was deeply unhappy with any criticism he perceived he got from us [the NZ Initiative].’’
The dispute is documented in a series of emails between Orr and Partridge released to the Sunday Star-Times under the Official Information Act. It unfolded last May, as the Reserve Bank was soliciting views in a submission process for its plan to strengthen the New Zealand financial sector.
The New Zealand Initiative was among the submitters.
The Reserve Bank proposed to nearly double the mandated Tier 1 capital level for big banks to 18 per cent of risk weighted assets; a position the regulator softened somewhat in December when it took a final decision.
Over the course of last year, many across industry and civil society were critical of the plan. It would be expensive for commercial banks which would pass costs on to customers. And the Reserve Bank’s promise to release a full cost benefit analysis only when it made its final decision was too late, they argued.
Partridge was among the critics and aired his views in a National Business Review column on May 3 headlined ‘‘Stop the Reserve Bank governor gambling with our money’’. Orr took umbrage.
The ‘‘gamble’’ was a rhetorical device deployed to describe the Reserve Bank’s costly proposal.
‘‘An intervention is needed,’’ the column concluded, ‘‘and preferably before the governor’s gambling problem harms us all’’.
Orr took the gambler reference literally. He pressed this point so vociferously with Hartwich at Wellington Airport on the morning of May 9 that Hartwich immediately phoned Partridge who penned Orr an apology.
‘‘The column was written in the spirit of robust critique of the bank’s proposals, rather than ad hominem … If the column crossed the line, I apologise – though I do not resile from the views on the Reserve Bank’s policy formation process,’’ Partridge wrote.
Orr, who’d received and read the email by the time his flight disembarked, remained unhappy, and tackled Hartwich again, now at Auckland Airport.
Later that afternoon he replied by email to Partridge.
‘‘I do not accept your apology as it provides no reflection on your: 1. Stating I have a gambling problem. 2. Mocking our use of a Ma¯ ori mythology… 3. Claiming below that you aimed to provide a robust critique of the [capital] proposal. You do not. You quote selective work of purported experts...’’
The email also noted that Orr saw in Partridge’s article ‘‘ongoing character assassination, an undertone of dislike of the Reserve Bank, and a clear bias in economic and ethnic preference’’. Orr signed it, ‘‘Adrian The person’’.
The ‘‘mocking’’ referred to a line in Partridge’s column that noted ‘‘the current governor’s insistence on likening the Reserve Bank to a Ma¯ ori tree-god, something to make even the staunchest banking student’s eyes glaze over.’’
Since 2018, the Reserve Bank has used the Ma¯ ori myth of the forest god, Ta¯ ne Mahuta, to explain its function within the financial system.
Orr declined to be interviewed on the subject of his fractious relationship with the NZ Initiative. As part of the OIA response, the bank noted ‘‘the governor stands by the correspondence he made, and has a good working relationship with all those you have requested correspondence with’’.
The Sunday Star-Times included in OIA requests communication with other industry players. The bank released email correspondence but denied the release of texts on the basis that they were trivial or no longer held. It said that it holds no records of phone conversations.
Orr’s exchange with Partridge fits a broader pattern of hectoring his critics last year. Reacting to a May blog post by academic and bank capital expert Martien Lubberink, Orr penned a critical letter and then threatened to share it with Lubberink’s colleagues.
He also took to task journalist Jenny Ruth at a press conference over a news story he didn’t agree with.
Sources, who asked not to be named, described heated phone calls with Orr, some at odd hours, and a pattern of publicly belittling and berating those who disagreed with him at conferences and on the sidelines of industry events.
The dispute with Orr on May 9 was clearly the cause of some consternation to Partridge and Hartwich, as the governor was scheduled to address New Zealand Initiative members the following day.
In a final effort to salve Orr’s feelings before the talk, Partridge wrote again first thing on the morning of May 10. ‘‘I can see my article upset you. That was never my intention and I apologise for this. I also appreciate you are on the receiving end of a lot of unfair criticism.’’
On the use of mythology, he wrote, ‘‘my issue is the aptness of the metaphor to the bank’’.
Orr replied within the hour, emphasising his displeasure at the public nature of Partridge’s original criticism: ‘‘Why can’t you just have a discussion rather than a ‘debate’ – and with us direct not via articles that you and your colleagues enjoy publishing? Especially when there is a submission process that has been extended in time twice.’’
Later in the day Orr delivered a talk to New Zealand Initiative members, largely an industryfocused group. A Reserve Bank spokesman said no written text or slides were used for the presentation which was ‘‘off the cuff’’.
The New Zealand Initiative said the talk was given under the Chatham House Rule, whereby speakers cannot be linked, either directly or indirectly, to what they’ve said.
One attendee said Orr seemed annoyed and was pointedly critical of Partridge.
Subsequent emails between Orr and Partridge exchange only civilities on the subject of the talk; they continue to wrestle a difference of views over
Relations between Roger Partridge and Adrian Orr clearly remain strained.
the Reserve Bank’s capital proposal.
Contacted this week, Partridge declined to comment directly on Orr’s conduct. He said his organisation maintains a ‘‘constructive and ongoing dialogue with the Reserve Bank on the things the Reserve Bank is working on’’.
However, relations between Partridge and the governor clearly remain strained. On December 10, Orr gave an interview with
NBR wherein he complained of abuse he suffered on taking up his post at the bank in March, 2018.
‘‘When I turned up as governor and I walked into this vacuum, the first thing I received was a NZ Initiative report on how we don’t ring, we don’t write, we don’t come to see you, we don’t explain … we are humans behind this concept called the central bank, you can’t just abuse us.’’
The report was the Initiative’s Who guards the
guards which found that among New Zealand’s leading commercial regulators the Reserve Bank enjoyed the lowest levels of respect and confidence from those it regulated. It was published just as Orr took up his post as governor, but it wasn’t something he objected to at the time.
On April 16, Orr and deputy governor Geoff Bascand wrote a letter to the heads of the New Zealand banks, correspondence released to the
Sunday Star-Times under the OIA shows. They attached an article by Partridge that presented the report’s findings and wrote: ‘‘The RBNZ doesn’t print well in it. We hear this and are cognisant of the challenges we have ahead with regard to our ‘service culture’.’’
Correspondence also notes that the NZ Initiative discussed the report with Reserve Bank leadership including Bascand well before publication. Far from blindsiding the incoming governor, Partridge alerted Orr that the report was forthcoming and offered to meet and discuss it with him.
Partridge was clearly incensed at Orr’s December 2019 about-face and asked the NBR to publish his rejoinder. It refused. Partridge shared the unpublished piece with the
Sunday Star-Times: ‘‘For Orr to suggest criticism should be limited because ‘we are humans’ is more than a little odd,’’ he wrote.
‘‘Criticism, even robust criticism, comes with the territory of exercising power ... And even where a regulator thinks criticism is misguided, it should be willing to ‘take it on the chin’.’’
Orr, 57, is nearly two years into his five-year mandate. And he’s often repeated that he receives both unfair criticism and personal abuse in his job. His correspondence, however, as far as it’s known, tells another tale: he habitually conflates criticism with abuse.