Is the Governor a bully?

Kate MacNamara at Stuff writes:

Reserve Bank governor Adrian Orr would like to see the big and very profitable Australian banks, which dominate the market, put up more of their own money to safeguard against shocks.
In order to protect the public from financial crisis he’s hit on a large and possibly expensive number. The “systemically” important banks should hold additional shareholder capital against the loans they make, significantly boosting the level currently required of them.
The move has plenty of critics but that debate must be put aside for now. The extraordinary way in which Orr has conducted the process to solicit opinion on his proposal raises this question first: does the end justify the means? …

It would be an open process, the bank said, welcoming all views. But that characterisation was soon at odds with the governor’s behaviour.
Numerous parties involved in the submission process described a pattern of behaviour by Orr of belittling and berating those who disagreed with him.

Orr has penned his critics letters and threatened to broadcast them. He has confronted submitters on the sidelines of industry conferences. Sometimes he called them up at odd hours to tear a strip off them for their views.

If this is correct, this is appalling behaviour. I can’t imagine any previous Reserve Bank Governor acting in such a way.

On the contrary, Orr appears to be unrivalled among central bankers in the developed world for the tempestuous and personally directed venting of his views.
Annelise Riles of Northwestern University’s Buffett Institute for Global Affairs, who’s studied the behaviour of central bankers and has even written a book about them, couldn’t think of a single comparator in contemporary times.
Central banks certainly use many channels to communicate with banks, she said. And it’s not uncommon for central bankers to let banks know how they feel.
“But berating them publicly is just not seen very much,” she said. And though private exchanges are less visible, she couldn’t think of any examples of bald incivility or hostility.

I can’t think of a position where it is more important the holder is restrained, considering how powerful they are.

Orr’s chequered behaviour is not something on which the Reserve Bank chairman, Neil Quigley, is prepared to act.
“I have not received a formal complaint from any party about the governor’s interaction with them,” he said. “The Board has full confidence in Adrian Orr’s leadership.”

Of course no one has done a formal complaint. It would be professional for them. But a good Board should be in touch with stakeholders enough to know if the reported allegations are true.

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