The Panel responsible for the Review of the Reserve Bank of Australia (RBA) today provided an update of what it has been hearing, at the halfway mark of its deliberations into the RBA’s monetary policy framework, performance, governance, and culture. The comments were made at a Committee for Economic Development of Australia (CEDA) lunch in Sydney.
The Panel closed its formal submission process earlier this month and will wind up its consultations by the end of 2022. To date the Panel and the Review Secretariat have received over 114 submissions, conducted a dozen focus groups, interviewed more than 230 people, and surveyed almost 1100 current and former RBA staff.
It has canvassed opinions both domestically and from overseas, including from businesses, financial sector experts, unions, the community sector, academics, international public institutions, and the general public.
The Review Panel – comprising Professor Renée Fry‑McKibbin, Professor Carolyn Wilkins and Dr Gordon de Brouwer – is pleased with the level of engagement and the quality of the discussion.
The Panel is confident it is collecting the breadth and depth of opinion it needs, to provide Government with recommendations to revitalise the RBA and prepare it for the years ahead.
The Panel is seeing a number of themes emerging which it is currently analysing.
- On monetary policy frameworks, the Panel has heard deep support for monetary policy to continue to be conducted by an independent central bank. There has been general, but not universal, support for a flexible inflation targeting framework, which is seen to have contributed to strong economic outcomes over the last 30 years. Several suggestions have been put to the Panel for how to specify that framework more clearly.
- On the RBA’s performance, there have been criticisms of the Bank’s approach to implementing the framework and communicating its decisions over recent years. These have focussed on periods of undershooting and overshooting the inflation target as well as the use of unconventional monetary policies.
- On governance, the Panel has heard suggestions for ways to increase the clarity of the Board’s role and strengthen its accountability and composition to support effective future monetary policy decision making.
- On the RBA as an institution, the Panel has heard that the RBA has high‑performing, collegiate staff who are dedicated to public service. It has received suggestions for ways that the Bank’s culture could be strengthened, including to increase internal debate and openness to outside ideas.
The Panel thanks the many people who have shared their knowledge and opinions. These conversations have underlined the important role of Australia’s central bank and how committed the contributors are to ensuring the Bank’s future success.
The Review was announced by the Treasurer, Hon Dr Jim Chalmers, on 20 July this year and will be delivered to the Government in March 2023. It is the first review into the RBA in more than 30 years.
A video link to today’s discussion will be available on the CEDA website soon.