But by 1.30pm, the announcement ended up being made.
Emails released suggest there was a scramble. Willis’ staff were still finalising a press release at noon, before the Treasury sent through talking points about the strength of New Zealand’s macroeconomic institutions at 1pm.
Later that day, Quigley fronted media in a hurried press conference that appeared to be arranged at the last minute.
Economists from around the world, including former Federal Reserve chairman Ben Bernanke, were arriving in New Zealand at the same time for a conference to mark 35 years of inflation targeting, pioneered by Kiwis.
“Did the governor ever raise his voice with you?”
Another document released to the Herald details a list of questions Willis’ press secretary said journalists might ask, as well as some suggested answers.
A line of questioning Willis was prepped to answer included: “Did you ever have disagreements with Adrian Orr?”
The press secretary advised Willis to respond: “I’m not going to discuss what happens in meetings that discuss confidential and sensitive matters.”
The press secretary suggested a follow-up question could be: “Did the governor ever raise his voice with you?”
Willis was advised to respond, “As I’ve said, my relationship with Adrian Orr was professional. It’s not appropriate for me to comment further on meetings that discussed sensitive and confidential matters.”
Separately, screenshots of texts between Willis and her press secretary show she told the press secretary not to discuss the nature of her meeting with Orr on February 24.
“Do not give the purpose of the meeting,” Willis said.
While Orr hasn’t spoken publicly since his resignation, Quigley has said he resigned for “personal reasons”.
Bank capital a known sticking point
There has been speculation Orr might have resigned over the fact Willis wanted the Reserve Bank to loosen the way it regulates banks, by allowing them to hold less capital than is currently planned.
Orr was a fierce proponent of making banks hold more capital – even if it eroded their profits – to make them stronger.
However, Willis thought the rules could be upping the cost and limiting the availability of bank lending, so in August revealed, via the Herald, that she was open to making the Reserve Bank change its rules.
On Monday, the Reserve Bank board announced it would review the rules, which have a seven-year phase-in period until 2028.
Willis wasn’t briefed on answering questions from journalists related to bank capital.
However, in the days leading up to her February 24 meeting with Orr, she received reports from the Reserve Bank and Treasury on the capital rules, and a briefing on a meeting with lawyer Simon Jensen and investment banker Andrew Body, who have been lobbying her to weaken the rules.
Willis didn’t ask Orr to resign
Coming back to the questions Willis was prepped for, she was advised to say she didn’t ask Orr to resign.
If asked whether his resignation was linked to the envelope of funding the Government gives the Reserve Bank every five years, or the fact Willis opposed her predecessor reappointing Orr to a second five-year term as governor, Willis was advised to say, “Not that I’m aware of”.
Willis spoke to the Herald about possible funding cuts shortly before Orr’s resignation, while negotiations with the Reserve Bank board were under way.
Willis was also prepped to say she had confidence in the Reserve Bank board.
If asked if she had confidence in Orr, Willis was advised to say: “Yes. I’m confident he discharged his obligations under the Reserve Bank Act and that is consistent with the advice I received from the board.”
Separately, text messages between Willis and her press secretary on March 5 show she was advised to avoid a part of the Parliament building, known as “the tiles”, where media are allowed to question MPs.
The texts were sent on the back of Willis and her office receiving further queries about Orr’s resignation, after she fronted media.
The Herald has attempted to contact Orr for comment.
While his resignation as governor took effect immediately, he officially remained employed by the Reserve Bank until March 31.
Christian Hawkesby has been Acting Governor.
Jenée Tibshraeny is the Herald’s Wellington business editor, based in the Parliamentary Press Gallery. She specialises in Government and Reserve Bank policymaking, economics and banking.
