Central Bank chief Makhlouf ‘learned’ from NZ budget leak scandal

‘One of the things I have learned is ... taking a bit of time in communicating with media’

An investigation by New Zealand’s deputy state services commissioner concluded that Gabriel Makhlouf sought to blame others and managed the incident poorly in three May media engagements. File photograph: Getty

An investigation by New Zealand’s deputy state services commissioner concluded that Gabriel Makhlouf sought to blame others and managed the incident poorly in three May media engagements. File photograph: Getty

 

The Central Bank of Ireland’s new governor, Gabriel Makhlouf, has said that he has learned from an investigation into his handling of a budget leaks scandal in New Zealand in the months before he took up his role in Dublin.

The former UK civil servant, who was hired in 2011 to head New Zealand’s treasury department, claimed in his last weeks in office in May that the ministry’s IT system had been deliberately and systematically hacked, resulting in the leak of sensitive budget information.

However, it later emerged that the information had simply been published on the ministry’s website and could be accessed using a search function. An investigation by New Zealand’s deputy state services commissioner, John Ombler, concluded at the end of June that Mr Makhlouf sought to blame others and managed the incident poorly in three media engagements in late May.

“I would think the three points he made, those findings, were legitimate,” Mr Makhlouf said in an interview with RTÉ, aired on Friday. He noted, however, that the report also found that he had acted in good faith and was politically neutral at all times.

“One of the things I have learned is the importance of taking a bit of time in communicating with the media.”

The comments are his first public remarks on his handling of the controversy and follow on from a letter he wrote to Minister for Finance Paschal Donohoe, dated July 15th, in which he said he could have handled the issue “more clearly and with a different emphasis”.

‘Listening mode’ banker

Mr Makhlouf, who took over as Central Bank governor last Monday, said in an email to staff that day that he would be in “listening mode” for the coming months as he seeks to ensure the bank is up to the task of safeguarding monetary and financial stability, and serving consumers and the economy.

Addressing Brexit in his RTÉ interview, the governor said that his view is that the financial industry “is resilient”, though it is up to individual firms to make sure they are properly prepared for the fallout from the UK exiting the EU.

He acknowledged that the Central Bank has faced “some criticism in the past on the speed” at which it has acted addressing issues it needed to tackle. “But I think it has learned its lessons,” he said.

However, he said that he was concerned about the culture of the industry, both in Ireland and overseas.

“My sense is that some financial institutions are in denial,” he said. “I think the onus is on them to show the community as a whole that they have changed.”