Reserve Bank halts lock-ups after MediaWorks embargo breach

UPDATED April 15 2016: Reserve Bank admits axing lock-ups may result in misreporting

The Reserve Bank will cease to host embargoed lock-ups for journalists and analysts on market-sensitive events such as monetary policy statements because MediaWorks leaked the March 10 cut in the official cash rate (OCR) about an hour ahead of the embargo ending.

Reserve Bank communications head Mike Hannah says an independent investigation by Deloitte’s forensic unit found that a Newshub MediaWorks reporter leaked the OCR decision to several people in the Newshub office.

That information was then passed on by another person in Newshub MediaWorks to “an economics blogger," Mr Hannah says.

That blogger was former Reserve Bank staffer Michael Reddell who reported the leak to the central bank.

“I had an email out of the blue at around 8am –  most definitely not from someone in the bank –  telling me that the sender had just heard that the OCR was to be cut by 25 basis points,” Mr Reddell reported in his Croaking Cassandra blog that day. 

“I have no way of knowing if it was the fruit of a leak, or just inspired speculation, and was relieved to see the foreign exchange markets weren't moving but it wasn't a good look.”

Reserve Bank governor Graeme Wheeler said in a statement that the leak “is a serious and disappointing breach of many years of trust.

“It created the opportunity for improper gain on financial markets and damage to the integrity of the bank’s communications. I am extremely disappointed that the information was leaked initially and then communicated more widely,” Mr Wheeler said.

“The fact that several people outside the bank, who had access to the information improperly, failed to alert the bank immediately, was irresponsible and left open a significant risk that the bank could have closed down quickly with an immediate official release.”

Nevertheless, the central bank says it has no evidence that the leak led to any financial market impact.

Mr Hannah says that, after looking at what other central banks do around the world, few of which provide such lock-ups, the bank has decided to cease hosting lock-ups.

MediaWorks chief executive Mark Weldon, a former head of New Zealand's stock exchange, said the company "unreservedly apologises" to the bank for the incident. The company said the leak was caused by a failure within its news department to follow proper process and changes have already been made. It didn't name those involved or say whether they had been disciplined.

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