The Reserve Bank of New Zealand (RBNZ) has confirmed Adrian Orr resigned as Governor as he wanted more funding for the central bank than the Government was willing to provide.

The bank said in a statement released under the Official Information Act that its board – chaired by Neil Quigley – conceded a lesser amount of funding was fine.

“This led to Mr Orr’s personal decision that he had achieved all he could as Governor of the Reserve Bank and could not continue in that role with significantly less funding than he thought was viable for the organisation,” the RBNZ said.

“Mr Orr and Professor Quigley entered discussions which led to Mr Orr’s decision to resign. The matter was distressing for Mr Orr.

“Both parties engaged senior counsel to negotiate an appropriate exit agreement. In the circumstances, an immediate departure and special leave for Mr Orr was appropriate, although he agreed to provide handover support.”

The RBNZ confirmed Orr’s resignation was brought forward by five days to March 5 – the day before the bank hosted an international conference – as Orr was cognisant some attendees may have known about his intention to resign.

The documents reveal Orr wanted to stick to the original plan for him to open the conference. He was also willing to be available to discuss his resignation.

“I will proudly open the conference tomorrow morning, noting I am there to discuss today’s news,” he said in an email to the board and two senior staff an hour before his resignation was announced.

Orr didn’t attend the conference and hasn’t commented publicly on the matter at all, with Quigley fronting a press conference, organised at the last minute, on the afternoon his resignation was announced.

The RBNZ said Finance Minister Nicola Willis’ desire for the RBNZ to require banks to hold less capital than is planned wasn’t a significant factor that led to Orr’s resignation.

Coming back to the funding issue, in September last year, the RBNZ bid for more than $1 billion of government funding for the five years to 2030.

Treasury advised Willis the proposal didn’t provide good value for money.

In late-February, she spoke to the Herald about the RBNZ needing to trim its expectations over funding.

Nine days after Orr resigned, the RBNZ submitted a more modest proposal of $786 million.

Then in mid-April, Willis confirmed the RBNZ’s five-year funding package would total nearly $776m - 8% more than the funding it received in the five years to 2025.

The number of full-time equivalent staff employed by the bank increased from 255 people in 2017-18 to 660 by January this year.

The RBNZ’s responsibilities expanded over this time, as the Government modernised the legislation it operates under. For example, the bank is standing up a big deposit compensation scheme in July and regulating deposit-takers more tightly.

The RBNZ took weeks to make its original funding proposal public. It is yet to release it’s updated one.

More to come.

Jenée Tibshraeny is the Herald‘s Wellington business editor, based in the Parliamentary Press Gallery. She specialises in government and Reserve Bank policymaking, economics and banking.