The Reserve Bank began cutting the cash rate early, in July 2008, at a time when there was still inflationary pressure (core inflation in the threes). As Lehman and friends fell, Bollard was not afraid to deliver big cuts. By the end of April 2009, the OCR had fallen from 8.25% to 2.5%. In contrast, Australia's cash rate only dropped from 7.25% to 3%, though the necessity for low rates there was lessened by aggressive fiscal policy. Usefully, Bollard didn't rule out the possibility of further cuts, which helped keep the banks in line, while his belief that inflation would be brought back into his target zone by the recession was vindicated.

Bollard put the rate up a quarter point in June 2010. The move was widely expected, with the Bank expecting 3.5% growth and a commodity-driven inflation wave on the horizon*, but some of us (e.g. Kel Sanderson) thought it was a grave mistake. The hike itself was bad enough, but the lack of clarity as to how high rates could go perhaps also damaged the fragile recovery -- banks seemed to think the OCR would rise to 5-6%. Instead, there was one further hike before the Christchurch earthquakes happened. I believe the rises would have had to be stopped or reversed in any case, but the earthquakes made it inarguable. The OCR returned to 2.5%, and should be there for a while.

So Bollard had a questionable call in 2006, a great call in 2007, and a bad call in 2010, and was good the rest of the time. A key question to address before appointing his successor is what led to the bad call. One contributing factor was the inaccurate growth forecasts in the aftermath of the crisis. While the Reserve Bank was far from the worst offender in this respect, their errors were nevertheless costly. Another factor was the pre-emptive reaction to the forecasted commodity bubble of late 2010/early 2011. In this case, the forecast was correct. Yet the inflation was transitory: the CPI and all measures of core inflation are now well within the target zone. Part of the problem was that some of the core inflation measures didn't seem to know the commodity bubble was transitory, while another part was the target was too low given the fragility of the economy. A rethink of the policy target agreement before Bollard's successor is chosen would be wise.

*edit: and a GST increase, duh