Major shake up of the Reserve Bank begins as two new board members are appointed
An economics professor and a regional bank chief have been announced as the first appointments to the Reserve Bank of Australia’s new rate-setting board.
Professor Renee Fry-McKibbin of the Australian National University and Marnie Baker, former CEO of Bendigo and Adelaide Bank, will join four continuing RBA board members to form the central bank’s new monetary policy board, Treasurer Jim Chalmers announced on Monday.
The RBA’s board was split into two, with interest rate setting powers taken over by the Monetary Policy Board, while a separate board will be responsible for the bank’s governance, bringing it in line with international counterparts .
The RBA’s overhaul comes after an independent review of the central bank’s activities, which criticized the current board’s decision-making and ability to hold the governor to account.
Other measures recommended by the review have already been implemented, including regular press conferences by the governor following rate decisions and reducing the number of board meetings per year from eleven to eight.
Professor Fry-McKibbin was part of the three-person review panel and has held leadership positions in the economics and social sciences community, both in Australia and the United Kingdom.
Ms Baker, who was also previously vice-president of the Australian Banking Association, brings a deep understanding of Australia’s financial system and an important regional perspective to the role, the Treasurer said.
The coalition has called for the monetary policy board to be made up entirely of members from the Reserve Bank’s current board of governors, to prevent the government stacking it with pro-Labor appointees.
Jim Chalmers has announced an economics professor and regional bank chief as the first appointment to the Reserve Bank of Australia’s new rate-setting board.
After delays in getting the RBA reforms through parliament, Labor eventually struck a deal with the Greens after agreeing to retain the government’s powers to override the bank’s interest rate decisions.
Former Business Council of Australia CEO Jennifer Westacott, former Telstra CEO David Thodey, business executive Danny Gilbert and banking executive Swati Dave are the new faces joining the board.
All members of the current Reserve Bank board will continue to serve on one of the two boards.