"The Reserve Bank's one-tool toolkit is plainly inadequate for the economic reality we live in."
The bank faced a dilemma, he said. If it cut interest rates, it risked another housing bubble.
Instead, it had done nothing, which had caused a high exchange rate, hurting exporters and domestic producers.
But Finance Minister Bill English practically ruled out any changes to the central bank's focus by saying he did not envisage any major changes to the policy targets agreement (PTA) which would be signed by Mr Wheeler and the Government.
"I consider the current PTA has served New Zealand well and there are benefits in maintaining consistency in the PTA.
"However, the global financial crisis has focused some attention on monetary policy and I want to ensure that the PTA continues to reflect best international practice."
Mr Wheeler was tipped in yesterday's Otago Daily Times as the most likely replacement for retiring governor Alan Bollard, who will step down from the job on September 25.
From 1997 to 2010, Mr Wheeler was employed by the World Bank. His most recent roles there included managing director, operations, from 2006-10, and vice-president and treasurer from 2001-06. The New Zealander lives in the United States, where he runs his own advisory business.
Westpac chief economist Dominick Stephens said selecting an outsider to become governor was a notable move.
Both previous governors - Dr Bollard and Don Brash - were surprise choices and both were brought in with a mandate for change in how the Reserve Bank operated.
Despite Mr English saying he did not envision any major changes to the current PTA, the scope for change extended well below that negotiation, Mr Stephens said.
The PTA was an agreement on the definition of "price stability" and how to gauge success or failure in reaching that target.
More complex changes, such as shifting from a single decision-maker to a committee for monetary policy decisions, or widening the Reserve Bank's goals beyond stability, would require legislative changes.
"It is possible that Mr Wheeler was chosen as someone who could shepherd through any such changes over the next few years," Mr Stephens said.
One change Mr Stephens predicted would occur was as the next tightening cycle began, the new governor would find himself with a range of "macro-prudential" tools developed over the last few years.
The next five years were likely to be an exercise in getting those tools operational, educating the market and the public in how they worked, and studying their effects, he said.
In a statement, Mr English paid tribute to Dr Bollard for his leadership at the Reserve Bank during the past 10 years.
"He helped steer the New Zealand financial system through the biggest global crisis in several generations. At the same time, he ensured that this country continued to enjoy one of the most stable inflation environments in the world."
Mr Wheeler will not be commenting on his nomination until after he takes up the role in September.
