Dark horse emerges for Reserve Bank job

20:40, Jun 24 2012
Alan Bollard
MONEY MAN: After nearly a decade in charge of monetary policy, Alan Bollard is stepping down.

The race for the role of Reserve Bank governor may have narrowed to just two horses with a decision likely to be made this week.

While current deputy governor Grant Spencer is seen as a good internal candidate to replace Alan Bollard, a new frontrunner, former World Bank managing director Graeme Wheeler, has grabbed the attention of pundits.

Bank of New Zealand head of research Stephen Toplis said if Wheeler had applied for the position he would be a strong contender.

"In my personal opinion Grant Spencer would do a terrific job and his major strength, of course, would be maintaining continuity of the central bank. However, there's been a history of non-bank employees having been appointed to the position.

"If you didn't want to stay with someone from inside the bank, [Wheeler] would seem an obvious choice, if indeed he has put his name forward."

Wheeler joined the World Bank in 1997 after holding the position of treasurer at the New Zealand Debt Management Office and deputy secretary at the New Zealand Treasury.


In 2007 he was reported to be among the leading contenders to replace Paul Wolfowitz as World Bank president when Wolfowitz quit after a scandal over a generous pay and promotion package he arranged for his girlfriend, a bank worker.

The Financial Times reported at the time that Wheeler was the one who told Wolfowitz to leave the bank at a meeting with all of the organisation's top officials. Calling him "quiet and unassuming", the article said bank officials were surprised at the Kiwi's stand against Wolfowitz's impropriety.

But the position has always been held by an American and the tradition was upheld when former US trade representative Robert Zoellick was appointed president.

Wheeler left his position as managing director of operations at the World Bank in 2010. He was now working at the European Bank for Reconstruction and Development, a source said.

Other contenders picked by former governor Don Brash, including the current Reserve Bank chairman Arthur Grimes, former Reserve Bank deputy Murray Sherwin and Canterbury University vice-chancellor Rod Carr, have ruled themselves out.

Brash said he was surprised they had all opted not to vie for the job, but he said Spencer, who was just as qualified, would be his next best guess to take over the job.

Toplis said the market probably wouldn't respond quickly in either case because Spencer represented continuity and Wheeler represented the unknown.

The Reserve Bank directed inquiries to the finance minister's office, which said it would not comment on the search for Bollard's replacement or when an announcement might take place.

Fairfax Media