Support for changes to Reserve Bank structure

By BRIAN FALLOW

Minor changes to the Reserve Bank's governance arrangements, arising from the Svensson review of the bank's operations, have the support of all parties in Parliament, Finance Minister Michael Cullen said yesterday.

The proposed changes, which will require amendments to the Reserve Bank Act, are:

* That the bank's board be chaired by a non-executive director, instead of the Governor.

* That the Governor remain a member of the board, but the two Deputy Governors be removed.

* That the chairman be elected by the non-executive directors.

The Governor, Dr Don Brash, welcomed both the changes and that they had cross-party support.

"Political consensus and stability are important in terms of the governance arrangements that apply to central banks."

The bank retains its operational independence and sole responsibility for monetary policy continues to rest with the Governor.

But the bank has been advertising for part-time advisers, to be chosen for their broad knowledge of the economy, to provide input.