Reserve Bank assistant governor resigns before the end of her term

Reserve Bank assistant governor Karen Silk is stepping down from the central bank five months before her term on the powerful committee that sets the Official Cash Rate is due to end.

Silk will participate in two more Monetary Policy Committee meetings, on October 28 and December 9, before departing the bank in mid-December.

Her five-year term on the committee was due to end in mid-May 2027.

Silk’s departure means two seats on the seven-member committee now need to be filled by people who work at the Reserve Bank.

The Reserve Bank is working on making an interim appointment to the committee ahead of the November 7 election.

Permanent appointments won’t be made before the election because the convention is for significant appointments not to be made within three months of an election. Monetary Policy Committee members are appointed by the Finance Minister on the recommendation of the Reserve Bank board.

Having spent much of her career in senior roles at Westpac before joining the Reserve Bank, Silk often speaks to how the Official Cash Rate (OCR), wholesale interest rates and competitive factors collectively affect retail interest rates.

As well as being on the Monetary Policy Committee, Silk is assistant governor money.

She oversaw a bold proposal for banks to be made to set up as many as 3000 free-to-use ATMs (automatic teller machines) throughout the country to improve people’s access to cash services.

The proposal, which banks criticised for being over-the-top, has since been watered down. Banks are now working with the Reserve Bank on a more workable solution to ensure people across the country can more easily withdraw, deposit and exchange cash.

Ian Woolford – the Reserve Bank’s director of money and cash, who sat below Silk and helped lead the consultation – retired in July after more than 30 years at the bank.

Governor Anna Breman, who started at the Reserve Bank shortly before the consultation was distributed, only saw a draft before it was sent out.

Kiwibank chief executive Steve Jurkovich said banks were “blindsided” by the proposal – the Governor not mentioning its significance over a lunch she had with bank chief executives the day before it was released.

Breman said she would tweak the composition of the bank’s executive leadership team, creating two new roles: assistant governor monetary policy and assistant governor payments and cash. The proposal is for the former to join the Monetary Policy Committee.

“These changes maintain clear leadership of our core functions while positioning the bank well for the future. Karen will continue to lead her portfolio through December and we have plans in place to ensure an orderly handover and continuity of decision-making,” Breman said.

She thanked Silk for her contribution to the bank: “Karen has brought deep financial-sector experience and strong leadership to the Reserve Bank. She has made an important contribution across monetary policy, financial markets, cash and payments, including work to support a modern and resilient financial system.

“I have thoroughly enjoyed working with Karen and the Reserve Bank wishes her the very best with her next steps.”

Silk said: “It has been a real privilege to serve in these roles and to work alongside people who care deeply about the wellbeing and prosperity of New Zealanders. I am proud of what we have achieved together.”

“After a long and varied career in banking and public service, this feels like the right time to begin a new chapter. I am looking forward to spending more time with family and pursuing personal interests, while continuing to contribute to New Zealand’s business and investment community.”

Jenée Tibshraeny is the Herald’s Wellington business editor, based in the parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.