An independent investigation has confirmed that highly sensitive and valuable market information on the March Official Cash Rate (OCR) cut decision was leaked by a journalist ahead of the official release, the Reserve Bank said today.
Following the investigation, the Bank will tighten its procedures for the release of confidential information. The Bank will discontinue embargoed lock-ups for news media and analysts ahead of announcements of interest rate decisions, Monetary Policy Statements and Financial Stability Reports.
The investigation by Deloitte’s forensic unit found that, contrary to the rules of the lock-up, information on the Bank’s decision to cut the OCR was transmitted by a Newshub Mediaworks reporter to several people in the Newshub office from the media lockup for the Monetary Policy Statement on 10 March.
This information was then passed on by another person in Newshub Mediaworks, well before the MPS official release, to an economics blogger.
This is very bad behaviour by Mediaworks and I believe the fair thing would be for Mediaworks to pay for the cost of the investigation, rather than taxpayers.
Multiple staff behaved badly. In summary what happened:
- A Mediaworks employee e-mailed a draft story an hour before the lockup finished to his colleagues. This was clearly against the rules. I have been in Budget lockups and you are told multiple times, and in writing, that you must not communicate with anyone before the lock up concludes. In an OCR lockup it is even more vital as currency markets will change on the OCR news.
- The Mediaworks employees who got the e-mail discussed it amaongst themselves, instead of telling the reporter he should not have sent it to them early
- Another Mediaworks employee overheard the conversation and for some reason decided to leak it to an economics blogger, Michael Reddell
The actions of the journalist in the lockup and the employee who leaked it to Reddell are appalling. Mediaworks should discipline them. Instead they won’t even name them.
Most media must know who was the Mediaworks journalist in the lockup. Why has he not been named? If it was say an analyst for a major trading bank who broke lockup rules, I’m sure their name will be in the media.
Finally this brings us ot the decision to end the lockups, I think this is regrettable. Lockups play a valuable role in allowing media and analysts to read the background to decisions, and write a more considered story. In an age where media compete to be the first to report the news online, lockups are even more valuable.
The better course of action for the Reserve Bank would be to ban Mediaworks employees from their lockups for say 12 months. Getting rid of the lockups punishes the innocent and will lead to a reduction in the quality of analysis of the Reserve Bank decisions.