• By Alan Bollard, with Sarah Gaitanos
• Auckland University Press
• RRP $29.99
You wouldn’t consider the global financial crisis as thriller, but for Alan Bollard and the team at the Reserve Bank, this is exactly what it became, an on-the-edge-of-your-seat drama that was played out day after day on screens of numbers and in the international theatres of politics and economics.
Bollard is known in the business as an adept writer and in this analysis of the events that unfolded from 2007 to this year, his readability has been enhanced even more by co-writer Sarah Gaitanos.
They take us from the overheated markets of 2007, where Bollard was preaching message of moderation and caution, through to the cruel events of early 2009, when it seemed that everything that could go wrong did.
As Lehman Brothers, AIG and Merrill Lynch crumbled under the weight of debt, Bollard called emergency meetings where teams worked late into the night to devise ways of keeping investor confidence steady and prevent New Zealand sliding into situation like that of the bankrupted Iceland.
One of the most interesting insights is into the government banks guarantee scheme. “The scheme was distortionary and costly, as we knew when we implemented it. We’d had little room to move.” But Bollard points out it did its job – to reassure Kiwis about the security of their deposits. As we know now, the South Canterbury Finance episode is the very outcome he feared, as finance companies used the scheme to take on risky investments.
Few of us knew the extent Bollard had to go to, to beg for funding from the world’s giant investment funds, flying around the world, cap in hand, on PowerPoint ‘road show’ for the New Zealand economy. It took its toll on his health as he battled migraines and lack of sleep, and he betrays that once, exhausted from day-long summit, he skived off early to catch the end of cricket game.
It was Bollard’s authoritative leadership, the convenience of communication within our small Reserve Bank and Treasury, and quick responses to events that kept us from the brink – although we stared into the abyss once or twice.
Even for those who don’t know their OCR from their ECB, the progression of this descent into financial hell is gripping tale, with enough human touches to make it truly personal insight.