Unlike most other major central banks, the RBA’s board is drawn from the general community and more than half of its members are not monetary policy experts. auspol RBA
The Reserve Bank faces reform rather than revolution as part of its first independent review since the early 1980s despite critics calling for the inquiry to shake up the institution’s approach to monetary policy and the way it is run.
Under the terms of reference, the review panel will examine the RBA’s objectives as set out in the original 1959 act that commits the bank to full employment, stability of the currency and “the economic prosperity and welfare of the people of Australia”.The review will also look at the bank’s inflation targeting framework, which was put in place in the early 1990s. This requires the RBA to hold inflation between 2 and 3 per cent over the economic cycle.
The five-year term of Barnaba, appointed by then-treasurer Scott Morrison, is due to end on August 30, but has been extended by 12 months. Monash University economist Zac Gross, who with Labor frontbencher Andrew Leigh released research this year showing the bank’s pre-COVID interest rate settings cost the country 270,000 jobs, said the terms of reference would enable a wide-ranging examination of the RBA.
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