A day in the life at the Reserve Bank of New Zealand
5.30a.m. and most people are still snoozing while one of our dealers in the Foreign Reserves Management team is already working on the US markets. The night security staff are exchanging vital bits of information with the day crew in their secret hideout, from where they control and monitor all people, and money, entering and leaving the building. The Information Technology staff, part of Knowledge Services Group, are doing the early morning checks to ensure all computer systems are ready for the day ahead.
By 7.00am no. 2 The Terrace is open for business.
If it’s Monetary Policy Statement release day journalists are in ‘lock-up’ on the Ground Floor, grinding their way through documents and statistics while they wait for the Governor’s words of wisdom and the announcement of the Official Cash Rate at 9.00am. Economic analysts from a number of financial institutions are also in ‘lock-up’ on level 8 reading the Monetary Policy Statement. At 9.00am they grab their cellphones and shout the Reserve Bank’s interest rate decision to their dealing rooms.
The Exchange Settlement Account System (ESAS) Real-Time Gross Settlement (RTGS) helpdesk opens at 7.00am to be available to banks who use the system to settle real time billions of dollars of transactions in the economy each day. Soon afterwards, Domestic Market Operations staff start preparations for the Bank’s daily Open Market Operations (OMOs). Financial Market Analysis and Research staff are busy gathering information on overnight events in the overseas market and the beginning of trading in New Zealand markets.
By now the Governor is ensconced in his office, and the majority of Reserve Bank employees are at work. Financial Market Analysis and Research staff meet at 8.30am with colleagues from other areas to share information, and discuss the implications of reports from financial markets and newsrooms round the world. At 8.40am the ESAS end-of-day has arrived (the previous banking day, that is), and at 9.30am the Domestic Market Operations section has announced the OMO. Bids will be taken until the close-off at 9:45am. At 10.00am on Monday mornings, the Forecasting Team, in Economics Department, have their weekly meeting, as do the International Issues Team. Both are getting ready to summarise and analyse the past week’s events for the Bank’s Monetary Policy Committee (which meets Tuesdays at 3.00pm).
But every 6 weeks comes the big 9.00am announcement of the Official Cash Rate - the one the markets, commentators, investors and homeowners alike all wait for. It’s one of the main influences we have on the New Zealand economy, and one of the ways in which we ensure financial stability for New Zealand.
Around the Bank the service departments are providing support for the policy departments and each other. Financial Services Group are paying bills, and salaries, NZClear Operations is in full swing, and settlements are being made of local and overseas money market transactions. Huge sums of money are involved (for market transactions, that is, not salaries!). Knowledge Services Group are supporting computer systems, developing applications, answering information requests, and gathering and analysing data.
The Work and Research Group has their weekly meeting at 11.00am on Tuesdays – discussing recent economic developments, current research and management issues.
The Financial System Oversight team may be working through the process of registering another bank or monitoring existing registered banks. Meanwhile, the Financial System Policy team is analysing and working on policies promoting the health and efficiency of the NZ banking and payments system.
Financial Market Analysis staff are continuing their day, talking with traders, brokers and market economists about developments in New Zealand’s financial markets.
Staff everywhere are beavering away at writing reports, Board papers, Monetary Policy Committee memos, research papers, articles for the Reserve Bank Bulletin, speeches, and, of course, minutes of meetings.
The Bank’s communications team are presenting their unique interpretation of what's in the news and what should be in the news to the Communications Committee, who meet during this time once a week.
An ever watchful Economic Department team member has been keenly viewing Statistics NZ and other agencies’ data releases, and then promptly produces a quick assessment (aptly named ‘At First Glance’) for Monetary Policy Committee consumption. And Currency staff are busily processing some of the 30,000 notes that can pass through their machines each hour.
Risk Assurance and Assessment have just finished their audit of one more Bank process, while the Human Resources team finalise another recruitment round and distribute a paper for discussion by the heads of departments at the weekly Senior Management Group meeting.
At 12noon, if it’s a Tuesday, the treasury bill tender closes and the Domestic Market Operations team processes the bids and awaits the Treasury’s approval before releasing the results at 1.00pm.
During this time, Reserve Bank staff are out walking, running, shopping, or maybe just eating in-house. This is an opportunity to share knowledge and network with others in the Bank. It’s a good time to catch-up with the Governor who regularly frequents the in-house cafeteria.
Staff might be in training for the Trot ‘round the Bot (Botanical Gardens), an annual walk/run that boasts around 90% staff participation, and one of the highlights of our social calendar. Some days there’ll be a game of indoor netball or soccer against another corporate. Or the eagerly awaited games of cricket and soccer against our near neighbour and fierce rival on the sports field, the Treasury.
Others are working, and our European bond market dealer has just started work, and will continue into the late shift. Economic Department staff may be taking a lunch break somewhere other than Wellington, in between meetings with business around the country as part of their intelligence gathering. Our Business Information Contacts process is one of the many ways we keep in touch with, and informed by, those in the business world.
Invigorated by quality food, fresh air and a walk around Wellington’s beautiful waterfront, staff are ready to continue the work of keeping New Zealand’s financial system and inflation stable and thus supportive of economic growth.
Meetings continue throughout the afternoon. Senior Management Group meet once a week to discuss internal management issues. The Monetary Policy Committee meet weekly, but more frequently as the Official Cash Rate decision date draws near. These cerebral, and sometimes lengthy, meetings provide a forum for lively and rigorous debate around the issues of monetary policy formulation and implementation. And everyone ensures they have their say – in full!
The Financial System Oversight Committee meets to discuss and make decisions around things to do with regulating and supervising banks and the operation of the payments system, each important functions of the Bank.
While all this is going on the Financial Services teams are meeting to ensure fluidity in their support services, and to arrange and agree a timetable for the forthcoming planning and budgeting round (oh yes, the rest of the Bank celebrates – has this really come ‘round so soon?). The Web and Support team in Knowledge Services Group ensures that the 3.00pm Reserve Bank statistics release is successfully published to the web.
The children in the Kids’ Reserve, an independent childcare centre located in the building, are having their afternoon tea. Just like some of us.
As the end of the day is within cooee the frenetic pace does not let up. Domestic Market Operations staff are receiving information from various government departments and agencies about their likely banking flows for the next day, and readying themselves for their 4.00pm ‘Forecast Cash Influence Prelim’ release which will be distributed via international newswires. Market Analysis and Research staff are flat out compiling their Daily Market Report, due for internal publication between 4.30pm and 5.00pm. At 4.45pm cash cut off (system closes) for all transactions in NZClear with a cash component value today. From 5pm the system is available for ESAS Accountholders through until 8.20am next day.
At 5.30pm the IT helpdesk closes and the front desk staff leave for the day. Currency and Building Services lock the doors at 6pm, closing the building to the public. But although the building may now be closed, and the majority of staff gone for the day, but a day in the life of the Bank hasn’t quite finished yet. Some are still beavering away on research projects that have reporting deadlines looming; some are preparing for early meetings the following day; some are still chatting about issues that come up during the day and still fascinate; the european bond market dealer is still at work, and the Continuous Linked Settlement (CLS) shift starts.
The hum of the air conditioning has however gone off, and a quiet permeates the building.
Security are doing their rounds of the building to make sure the building is secure and that we’ve been good energy efficient citizens and turned off lights and computers. Some staff are still catching up on work so as not to miss deadlines.
The CLS staff continue to settle foreign exchange transactions until 8:30pm (in winter) or midnight (in summer) to cover the 3 hour window in the world where all markets are open for value today (ie. southern hemisphere markets are coming to a close as the northern hemisphere’s day is starting).
Sometime in the evening our European bond market dealer leaves the building, and the Bank settles down for the night, awaiting the early arrival of our US dealer the next day.
That is unless some crisis occurs overnight, and for some people that means their day will start a whole lot earlier.