The Reserve Bank of Australia (RBA) is Australia's central bank.
Its duty is to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.
Why the Review is happening
The Treasurer announced an independent review of the RBA on 20 July 2022. It is the first wide‑ranging review of the RBA since current monetary policy arrangements were put in place in the 1990s.
Scope of the Review
The Review, led by 3 independent experts, is considering the RBA’s:
- policy implementation
- governance processes
- and public communications.
It is also considering the relationship between monetary, fiscal and macroprudential policy settings.
The Review is independent, transparent, and wide‑ranging, and is seeking the views of domestic and global experts, as well as members of the public.
The final report, with recommendations, will be provided to Government in March 2023.
Terms of Reference
The Review of the Reserve Bank of Australia (RBA) is designed to ensure that Australia’s monetary policy arrangements and the operations of the Bank continue to support strong macroeconomic outcomes for Australia in a complex and continuously evolving landscape.
1. The Review will assess Australia’s monetary policy arrangements:
1.1. The RBA’s objectives, as outlined in the Reserve Bank Act (1959) and in the Statement on the Conduct of Monetary Policy, including the continued appropriateness of the inflation targeting framework.
1.2. The interaction of monetary policy with fiscal and macroprudential policy, including during crises and when monetary policy space is limited.
1.2.1. This will include Australia’s macroprudential governance arrangements, but exclude APRA’s statutory role or functions.
2. It will also assess the following aspects of the RBA:
2.1. Its performance in meeting its objectives, including its choice of policy tools, policy implementation, policy communication, and how trade-offs between different objectives have been managed.
2.2. Its governance (including Board structure, experiences and expertise, composition and the appointments process) and accountability arrangements.
2.3. Its culture, management and recruitment processes.
3. The Review will exclude the RBA’s payments, financial infrastructure, banking, and banknotes functions.
4. The Review will consult extensively with domestic and global experts and members of the public.
5. The Review will take account of analysis conducted in prior reviews of other central banks, including the US Federal Reserve, the Bank of Canada, the Reserve Bank of New Zealand and the European Central Bank.
6. The Review may invite and publish submissions and seek information from any persons or bodies.
7. A final report, with a set of clear recommendations to Government, is to be provided to the Treasurer no later than March 2023.