75 years for the Reserve Bank of New Zealand
In August 2009 the Reserve Bank of New Zealand marks its 75th year of operations, three quarters of a century that span some of New Zealand's most tumultuous decades.
The Reserve Bank was founded in response to developments in the early twentieth century. Britain was eager for its Dominions to establish their own central banks, so they could set their monetary policies to suit specific local conditions. However, in New Zealand the wheels only began turning with vigour after a 1931 visit by British economic expert Otto Niemeyer, who recommended a central bank to the government of Prime Minister George Forbes.
The Bank opened on 1 August 1934 with little fanfare. "We were launched last Wednesday," founding Governor Leslie Lefeaux wrote to Niemeyer. "But no flags; no trumpets, and no breaking of champagne bottles on the bow. We merely glided gently and noiselessly down the slipway. I felt in the circumstances that that was the best course."
Today's Governor Alan Bollard notes that from this almost imperceptible beginning, the functions of the Reserve Bank have taken on significant growth and complexity in the past 75 years. "Although stabilisation is our pressing need at present, we have not lost sight of the need to continue with enhancements to our role as New Zealand's central bank," Dr Bollard said.
The present day role of the Bank is defined by the Reserve Bank Act 1989, which identifies a wide range of functions and powers that have made it one of the few ‘full service' central banks in the world.
The Reserve Bank nevertheless had an initial public impact in 1934 – all the old trading bank notes were replaced immediately by Reserve Bank tender. The Bank has supplied New Zealanders with their currency needs since, extending that role to coins in 1989.
To mark the anniversary Howard Davies, Director of the London School of Economics, and formerly Chairman of the UK Financial Services Authority, will deliver a public lecture entitled: "The Financial Crisis – who's to blame? Problems and remedies". Registrations are necessary and seats are limited. People can register through the Reserve Bank website.
A temporary exhibition marking 75 years of Reserve Bank operations will be open to the public in the Reserve Bank Museum from 3 August 2009.