Plan to overhaul the RBA including splitting the board in two could be back on the agenda

Plan to overhaul the RBA could be back on the agenda. Australia’s government Labor Party and left-wing Greens Party held last-minute talks to revive the stalled legislation

Bloomberg had the report (Bloomberg is gated).

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Reminder of what this is all about.

In 2023, the Reserve Bank of Australia (RBA) underwent a comprehensive review, leading to significant proposed reforms aimed at enhancing its governance and decision-making processes.

Key Proposed Changes:

1. Dual Board Structure:

   • Monetary Policy Board: This board will focus exclusively on setting monetary policy, including interest rates. It will comprise members with specialized expertise in economics and monetary policy.
   • Governance Board: This board will oversee the RBA’s operational aspects, such as management, strategy, and finances, ensuring effective organizational governance.

2. Meeting Frequency and Transparency:

   • The number of monetary policy meetings will be reduced from 11 to 8 per year, allowing for more in-depth discussions.
   • Press conferences will be held after each meeting to enhance transparency and public understanding of decisions.

3. Board Composition and Accountability:

   • The inclusion of external experts on the Monetary Policy Board aims to provide diverse perspectives and reduce the risk of “groupthink.”
   • Board members will be encouraged to make regular public appearances to discuss their views, promoting accountability.

4. Government Override Power:

   • The government retains the power to overrule RBA decisions in exceptional circumstances, ensuring a balance between independence and accountability.

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The points under “2” above are already in place.

ps.

• RBA Governor Bullock speaks later

Could be interesting!!!

This article was written by Eamonn Sheridan at www.forexlive.com.