First Deputy Governor of Sweden’s central bank Anna Breman to take charge at RBNZ in December

Anna Breman, currently First Deputy Governor of Sweden’s central bank, has been named new Governor of the Reserve Bank of New Zealand (RBNZ), making history as the first woman and non-New Zealander to fill the role.

Breman will begin her five-year term on December 1, taking over from Christian Hawkesby who held the Governor role on a short-term basis having previously been Deputy Governor with responsibility for Financial Stability.

Hawkesby will leave the RBNZ when Breman starts.

Breman says primary focus is providing stability to central bank

Breman's new role as RBNZ Governor means she will be the Bank’s chief executive, responsible for banking regulation, and chairing the Monetary Policy Committee which sets interest rates, while also serving as a member of the board that oversees performance and governance.

Speaking at a press conference alongside Finance Minister Nicola Willis on Wednesday, Breman says she is deeply honoured to be appointed Governor. 

"The Reserve Bank should, and it will remain, a source of strength and stability for the New Zealand economy, and together with the board and the staff, we will achieve this by focusing on our core mandate," Breman says.

"The Reserve Bank lists high in international rankings of transparency but I do believe that there is more work that needs to be done so we will strive for transparency, accountability and clear communication within all the work that we do." 

Breman says her primary focus is to provide stability to the central bank. 

When asked about her familiarity with the New Zealand economy, Breman says she feels familiar.

"I've read a lot and I'm looking forward to learning even more of course, meeting with staff and meeting with people."

Breman's appointment follows a five-month recruitment process to replace former governor Adrian Orr, who resigned abruptly in March during a disagreement with RBNZ’s board over a five-year funding deal.

Willis says Breman was the first recommendation made and that recommendation was made to her on August 14.

Willis says she then consulted with political parties for a two-week period following the nomination in Cabinet and the Governor-General provided approval for the appointment on September 8.

"We're opening a new chapter today, a new chapter in New Zealand's history and a new chapter for the Reserve Bank."

Willis says Breman comes to New Zealand with an impressive combination of technical skills and organisational leadership experience. She has been a Deputy Governor of Sweden’s Riksbank since 2019.

“She holds a PhD in Economics from the Stockholm School of Economics and has previously been group chief economist at Swedbank, a leading Swedish commercial bank. She has also worked at the Swedish Ministry of Finance, the World Bank and as an academic economist in the United States," says Willis.

“Dr Breman was nominated for the role by the Reserve Bank Board following a worldwide search in which 300 potential candidates were identified. The core criteria against which candidates were assessed were enterprise leadership, technical credentials, stakeholder engagement experience, personal resilience and cultural capability."

“A long list of 10 international and domestic candidates was created drawn from academia, government, financial or regulatory institutions and central bank leadership. Of these candidates, four were shortlisted for interviews with Board members during July," Willis says.

‘Test of trust and confidence’

Many market participants will be looking to the new governor to provide stability for the RBNZ which has been repeatedly rocked by resignations, scandals, funding cuts, and policy missteps.

Hawkesby recently acknowledged the central bank was facing a “test of trust and confidence”.

“It's typical for the RBNZ to be 'in the news' for our policy decisions, publications and research. But for too long this year the RBNZ has been 'the news', following the departure of the governor in March, the loss of our board chair in August, and everything in between,” he says. 

Many commentators expected Willis to choose an external candidate that could draw a line under this tumultuous five-year period and help rebuild credibility.

RBNZ departures

Orr's departure was described at the time as being a “personal decision”. However, disclosures and reporting have since revealed the board was considering firing Orr if he didn’t resign.

Former chairman Neil Quigley resigned in August after a conversation with Willis in which she expressed her disappointment at his handling of Orr’s resignation.

Willis says the process of looking for a new chair has kicked off. "I envisage taking a paper to Cabinet and making an announcement before the end of the year." 

Throughout all this drama, the central bank’s policymakers have been busy.

RBNZ’s prudential team have proposed a relaxation of bank capital rules, while its monetary policy committee have softened their policy stance as the economic recovery has faltered.

Christian Hawkesby to leave RBNZ when Breman starts

Christian Hawkesby has held the Governor role on a short-term basis having previously been Deputy Governor with responsibility for Financial Stability.

Hawkesby’s term as Governor will be extended until November 30 and will finish up at the RBNZ when Breman starts. 

Willis acknowledged Hawkesby for doing "an admirable job of filling in as Governor" and wished him all the best for the future. 

In a statement, Hawkesby says it is important to provide space for the new Governor to succeed, and his key priority will be a smooth handover to the new Governor.

“I am fully committed to supporting Anna and leading the RBNZ through this remaining period - including completing our organisational changes, concluding the Capital Review of the deposit taking sector, chairing the MPC, delivering the Financial Stability Report, leading our remaining parliamentary hearings, and supporting the morale of our staff through a period of significant change," Hawkesby says. 

Hawkesby thanked the Board for its support over the past six and half years at the RBNZ, first as Assistant Governor, then as Deputy Governor, and most recently as Governor under section 96 of the RBNZ Act.

RBNZ Board Deputy Chair Rodger Finlay says: “The Board is grateful for Christian’s ongoing leadership and commitment to RBNZ."

"We are very fortunate to have had him step into the role of Governor during a transformative time for RBNZ. We respect his decision to resign from RBNZ when the new Governor is in post and thank him for his continued commitment to RBNZ’s people and its important work.”

On Breman's appointment, Finlay says her "experience spans central banking, academia and financial markets. She has strong technical knowledge within monetary policy, financial stability and payments systems after several years at the Executive Board at the Riksbank and an extensive international experience".

Labour finance spokesperson Barbara Edmonds says Breman has an impressive background and looks forward to engaging with her. 

"There are some big challenges ahead for New Zealand and the Governor plays an important role protecting and promoting the stability of New Zealand's financial system in an increasingly volatile world." 

Additional reporting by Dan Brunskill