It Takes a Village: How the RBNZ Left Its Governor Exposed
On night shifts, afterthoughts, and the organization that wasn't there
This is the third post in a series. The first, A steep learning curve for RBNZ Governor Breman, argued that co-signing the statement in support of Jerome Powell invited the very political interference it sought to oppose. The second, The option to wait - never exercise early, highlighted the importance of coordination and restraint.
This post asks a different question: why was the Governor so poorly equipped to make a better choice?
Last week, the RBNZ released a tranche of documents in response to Official Information Act requests. They are worth reading carefully, not for any single revelation, but for what they collectively say about how the RBNZ functions as an organization.
Alone in the Night
The OIA response states, as though it were entirely unremarkable, that Governor Breman attended the BIS Global Economy Meeting “online between 1-3am NZ Time on 14 January 2026” and that “as this is a Governor-level meeting, no other RBNZ Board members or staff attended.”
Pause on that for a moment.
In a mature central banking institution, significant international meetings come with preparation: a briefing on the agenda and the likely sensitivities, a clear mandate establishing what can be decided on the spot and what requires further consultation, and a point of contact available outside business hours. Not because crises are expected at every meeting, but because consequential things occasionally happen, and an institution cannot rely on the judgement of a single person, however capable, at 3am. There is solid evidence for this concern: sleep deprivation research consistently finds that after 17 to 19 hours without sleep, cognitive performance deteriorates to a level comparable to mild alcohol intoxication. Dr Breman was not reckless. She was human. Her employer should have known that.
At the RBNZ, it appears little of this was in place. Dr Breman attended alone, apparently without a briefing on New Zealand’s specific position relative to a statement being coordinated in real time, and without the likes of an assistant governor available to consult before acting. In larger, more structured organisations, it is not uncommon for a leader to delegate night-shift attendance, precisely to preserve their own capacity for deliberation on the things that matter most. Or there is a duty officer. Or there is at minimum a protocol for what requires escalation before a decision is made.
Here, there was apparently none of that. And so, when Pablo Hernandez de Cos of the BIS signalled that governors wishing to sign should do so promptly, Dr Breman made her call and emailed him without delay.
Peer Pressure Motivation
The motivation for signing, as it emerges from the OIA documents, is telling. Dr Breman wrote to her board chair and senior staff that it would look very strange if the RBNZ did not sign, given the RBA, the Bank of England, the Bank of Canada, the Swiss National Bank, Norges Bank, and all ECB central banks had done so.
That is peer pressure at work. And while I understand the logic: New Zealand does not wish to be conspicuously absent from the statement, it is a thin foundation for a decision with foreign policy implications. A well-supported and well-informed governor would have joined the BIS meeting with a considered view, developed in advance, on the Powell video message. It was the talk of the town on Monday, and would likely have been discussed at lunchtime and at the proverbial water cooler. The statement in support of Powell was available online before the BIS meeting started, and some news outlets were already covering it around 9pm. The question "what do we do if this comes up at the BIS meeting?" is not a difficult one to ask beforehand. It just requires someone to ask it.
The emails reinforce the picture. "I emailed and hope it is not too late," Dr Breman wrote to her board chair at 3:22am. By 9:20am she was asking staff to confirm whether the RBNZ was listed on the statement, having seen comments on LinkedIn suggesting the RBA was included but not the RBNZ. These are not the actions of a leader operating from a position of institutional confidence. They are the actions of someone navigating a consequential decision alone, without preparation, and anxious about the outcome. The fault for that lies not with Dr Breman but with the organisation that left her in that position.
The Urgency That Wasn’t
My previous post noted that the option to wait was always available: the ECB website explicitly allowed for additional signatories after the initial publication. The RBNZ’s OIA response nevertheless states that “a decision was needed in the early hours of the morning,” and Dr Breman told Bloomberg she was “influenced by the fact that there was a sense of urgency.”
This perceived urgency may well reflect a misreading of what the BIS secretariat intended. When Pablo asked governors to “contact the BIS immediately,” he may have meant within days, not hours. But without a staff member available to seek clarification, the Governor was left to interpret that signal alone, in the middle of the night, likely without proper context. What looks like a lapse in judgement could also be a gap in institutional support.
The Morning After
The email chain from the morning of 14 January tells the rest of the story. By 8:34am, Assistant Governor John McDermott was tagging Kate Le Quesne: “we should also give MOF a heads-up... maybe MFAT.” Karen Silk followed minutes later with her agreement. Kate Le Quesne replied that the team was already on it.
These are capable people responding professionally to a fast-moving situation. But the fact that notifying the Ministry of Finance and the Ministry of Foreign Affairs and Trade arose as a suggestion after the event instead of appearing on a pre-meeting checklist reveals how little preparation had gone into this scenario. Stakeholder communication is not an afterthought in a well-run institution. It is planned in advance, precisely so that a governor does not have to improvise at 3am.
The Governor Who Needed a Village
My previous post drew on my experience at De Nederlandsche Bank to argue that coordination culture matters. The RBNZ under Orr appeared to undervalue it. What the OIA documents suggest is something slightly different: the problem is not only cultural but structural. The RBNZ appears to have been built (and perhaps still operates) around the assumption that its governor is a powerful, well-networked individual who can navigate difficult decisions through personal relationships and accumulated local knowledge.
That model holds when the governor has spent years embedded in New Zealand’s policy and political landscape. However, it is fragile when the governor is a genuine outsider. Dr Breman arrived from Stockholm without the informal connections to Treasury, the Beehive, and the broader Wellington policy community that her predecessor had built over decades, connections that would have told her, before a night-shift meeting, that New Zealand’s foreign policy independence is a live political sensitivity and that Winston Peters does not take kindly to perceived encroachments on his portfolio.
The contrast with Powell is instructive. As Stephanie Flanders notes in this episode of Bloomberg’s Trumponomics, his resilience rests on decades of carefully cultivated relationships on Capitol Hill, on both sides of the aisle. Against this background it is not surprising that Dr Breman was the only governor publicly rebuked by her government for signing. The difference is not one of ability. It is one of network.
Why this is Important
This post raises a question that goes beyond this particular incident. If the Governor can find herself isolated, under-briefed, and effectively improvising on a relatively low-stakes discretionary matter (one where, as I argued previously, the option to wait was always available) what does this imply about decision-making when the stakes are genuinely high?
Financial stability work does not always offer the luxury of a night’s reflection. But it does require that the institution around a governor is capable of providing support, context, and process. Regardless of who the governor is or where they came from.
It takes a village. On the morning of 14 January, the RBNZ village was like Wellington on a rainy Sunday afternoon.