RBNZ’s Next Governor: A Shortlist of Four

• Published on
• 18 Mar 2025, 09:17 AM

(This article was first published on Monday, March 17 at 9:24 PM as an email to subscribers and trialists)

By Sophia Rodrigues

(Sydney, March 17, 2025) – An obvious replacement for Adrian Orr as the governor of the Reserve Bank of New Zealand is not apparent given the abruptness of his resignation and the lack of any precedent in the last few decades of a deputy taking up the position.

The exception is Grant Spencer, then-deputy governor, who took over the acting governor role for six months in 2017-18 following Graeme Wheeler’s departure.

The last deputy governor to rise to the governor role was Dick Wilks who was also the last career central banker to be elevated to the top position. Wilks served in the position during 1982-84.

According to the RBNZ website, the governor is accountable for the RBNZ’s performance in maintaining price stability, promoting a sound and efficient financial system, and meeting the currency needs of the public but retains statutory independence as to how these key outcomes are achieved.

Here’s CB Intel’s shortlist of four people who have the potential to be the next RBNZ governor.

John McDermott

McDermott was assistant governor (economics) at the RBNZ before he left in 2019 to join Motu Research as executive director of economic and public policy research. Ironically, McDermott joined RBNZ in 2007 when Adrian Orr left as the head of financial stability and his position was taken by Grant Spencer, leaving the head of economics position vacant. McDermott became the assistant governor  in 2008.

McDermott has a doctoral degree in economics from Yale University and while a governor doesn’t need that qualification, it’s a good one to have. The last governor to have a doctorate was Alan Bollard.

McDermott is regarded as a solid macroeconomic expert, and his public policy experience at Motu Research has increased the breadth of his work experience ranging from the IMF, the private sector and the RBNZ.

He was an assistant governor when the governor was the sole monetary policy decision-maker, so he would know the value of a committee decision-making model that took effect after his departure.

Should the preference be for an external candidate but with a past relationship with the RBNZ, McDermott would emerge as the top choice.

Christian Hawkesby

Currently the acting governor, Hawkesby would be the preferred candidate if an internal candidate is selected. He’s worked both in economics and financial stability, so has a good mix of experience within the RBNZ.

The main question is whether he has enough experience at RBNZ at a senior level to elevate him to a permanent governor role, given he joined in 2019.

Hawkesby doesn’t have a doctorate but a master’s degree in commerce (economics) from the University of Canterbury. But he started his career at the RBNZ before moving on to the Bank of England where he worked for nearly 10 years. He returned to New Zealand and was part of the team that established Harbour Asset Management where he headed fixed income.

Hawkesby's central banking experience is enhanced with work at the Bank of England, but he lacks  public policy experience.

Hawkesby is CB-Intel’s number two candidate, just marginally below number one.

Prasanna Gai

Gai has excellent credentials, but he is an academic who recently joined the RBNZ’s Monetary Policy Committee.

Gai is a macroeconomics professor at the University of Auckland, and in the past worked at the Bank of England and the Bank of Canada, though both were in consultancy/advisory roles. To that extent, his direct work experience at central banks is limited.

Gai had prepared a background report for the RBA’s Review panel where he discussed the international experience with monetary policy governance. One of his comments was about the New Zealand Ministry opting for a largely non-expert board that lacked the deep understanding to challenge the governor and in-house analysis on prudential and financial stability issues.

There is no denying Gai is a great asset on the MPC and has likely contributed to sharper monetary policy debates since joining in July 2024. But he probably doesn’t have enough work experience outside the academic arena to work in a governor role.

On the plus side, Gai has a doctorate from the University of Oxford. Interestingly his first degree is from the Australian National University and he has worked at the ANU, so he probably had some links with Australia before.

Carl Hansen

Hansen has solid experience in public policy and is currently one of the external members of the RBNZ’s Monetary Policy Committee, joining in April. He is a strategic advisor for Meridian Energy and works for an independent consultancy.

Like Hawkesby, Hansen began his career at the RBNZ before moving on to roles mainly in the public sector. One of his career highlights was heading the Electricity Authority when it was established in 2010.

Hansen’s top qualification is a master’s degree in economics from the University of Michigan. The main drawback is the lack of senior central banking experience.

--Contact: Sophia@centralbankintel.com

Note: CB-Intel has relied on public profiles, including LinkedIn profiles, for work experience and qualifications background.