graeme wheeler : decision making in the reserve bank of new zealand speech by mr graeme wheeler, governor of the reserve bank of new zealand, to the university of auckland business school, auckland, 7 march 2013. * * * i ’ m sure that central banking was the furthest thing from his mind when the british mountaineer, eric langmuir aptly said : “ a decision without the pressure of consequence is hardly a decision at all ”. central bankers are often criticised for avoiding decisions, although leaving policy settings unchanged is often a major decision in itself. sometimes they are accused of communicating in a secret code with the real meaning known only to other central bankers. so how do we undertake important policy decisions in the reserve bank and how do we endeavour to communicate? i ) operational independence in 1990, the reserve bank became the first modern central bank to have a legislated structure in which the government took the lead in setting the objective, while the central bank had operational independence in, and formal accountability for, the execution of monetary policy. new zealand also led the way with flexible inflation targeting, a framework now widely adopted by central banks across the oecd region. the 1989 reserve bank of new zealand act states that “ the primary function of the reserve bank is to formulate and implement monetary policy directed to the economic objective of achieving and maintaining stability in the general level of prices ”. the legislation created provision for a policy targets agreement ( pta ) between the minister of finance and the governor of the bank. in practice, the pta defines the objectives of the bank, specifies an inflation range representing price stability and outlines considerations that the bank must give weight to in framing monetary policy decisions. the current pta, signed on 20 september 2012, introduces the goal of keeping future average cpi inflation near the two percent target mid - point of the one percent to three percent range. like its predecessor ptas, it also requires the bank to seek to avoid unnecessary instability in output, interest rates, and the exchange rate. the governor ’ s responsibilities and obligations are conferred and imposed under the 1989 reserve bank of new zealand act, the 2009 amlcft act, the 2010 insurance ( prudential supervision act ), to which is expected to be added the non - bank deposit takers legislation currently in the house. the governor has the power to act for the bank on all matters within the ambit of the acts that are not required to be dealt with by the board of the reserve bank ( which relate

bodil nyboe andersen : recent economic developments in denmark speech by mrs bodil nyboe andersen, governor of the national bank of denmark, at the annual meeting of the association of danish mortgage banks, copenhagen, 28 april 2005. * * * the global economy is generally in a period of strong growth – at a rate of 5. 1 per cent in 2004. this may not completely match the picture painted by the media. the reason is that the figure conceals very strong variation between growth rates in various parts of the world. after a slowdown in 2001 and the beginning of 2002, the usa has achieved annual growth of 3 - 4 per cent. this growth has been driven particularly by strong private consumption, stimulated by tax reductions and very low interest rates. however, the downside in the usa has been a high and growing current - account deficit and a considerable government finance deficit. both of these deficits are often mentioned as the reason for the dollar's weakening against the euro. however, the usa has not faced difficulties in financing its current - account deficit and selling its government bonds. the demand for dollar assets is still high, especially from the asian countries. even though financing has not presented problems for the usa, this does not change the fact that the usa is becoming increasingly indebted to the rest of the world. this course does not appear sustainable, but it is naturally hard to predict how long it can continue. asia, apart from japan, has even higher annual growth rates, at 6 - 9 per cent. this reflects strong growth in exports to especially the usa, as well as growing domestic demand, including rising private consumption. this american - asian growth is driving the global economy. growth in the euro area, on the other hand, is currently very weak. once again, private consumption is part of the explanation. especially in germany, households are reluctant to increase their consumption demand. more fundamentally, germany has a clear need for structural reforms of its labour market and welfare system. the reforms are being addressed, but as long as the changes are still ongoing and even more are expected, general uncertainty will prevail. this contributes to the caution towards increasing private consumption. structural reforms are also needed elsewhere in the euro area. for the euro area overall, the weak development in consumption is a key factor behind the moderate growth. in denmark, however, we are good consumers! at least in the sense that we are currently spending a lot of money. private consumption