Former Reserve Bank of New Zealand governor Adrian Orr’s refusal to budge on his demands for Australia’s four major banks to hold world-leading levels of capital was a factor in his shock resignation, as the Luxon government considers relaxing the buffers to stimulate lending growth.

Orr abruptly quit the central bank – also the prudential regulator of commercial banks – on Wednesday with three years still to run in his second five-year term. It is highly unusual for a governor of a central bank to leave midterm and even more so without providing a reason.