Reserve Bank of Australia
The
Reserve Bank of Australia came into being on the
14 January 1960 to operate as
Australia's
central bank and banknote issuing authority. The bank offers banking services to the Federal Government, and to licensed banks that participate in the
payments system. It is headed by the Governor of the Reserve Bank, presently
Ian Macfarlane, who is shortly to retire and be replaced by
Glenn Stevens.
The predecessor to the Reserve Bank, the
Commonwealth Bank of Australia, was established in 1911. It was initially just a commercial and savings bank. The Department of Treasury issued notes until 1924, when this responsibility was transferred to the Commonwealth Bank.
The Commonwealth Bank gradually gained more central banking activities until 1945, when new laws formalised its central banking powers. In 1960 the central banking functions of the Commonwealth Bank were transferred to the new Reserve Bank of Australia.
The 1980s saw the abolition of Exchange Control as a result of the float of the Australian Dollar and the creation of a banking supervision function for the Reserve Bank. This banking supervision function was then transferred to the newly created
Australian Prudential Regulation Authority in 1998.
"It is the duty of the Reserve Bank Board, within the limits of its powers, to ensure that the monetary and banking policy of the Bank is directed to the greatest advantage of the people of Australia and that the powers of the Bank ... are exercised in such a manner as, in the opinion of the Reserve Bank Board, will best contribute to:(a) the stability of the
currency of Australia
(b) the maintenance of
full employment in Australia; and
''(c) the economic prosperity and welfare of the people of Australia.''"
In practice the Reserve Bank concentrates on the first objective, that is to control
inflation through
monetary policy. (See also
open market operation.) The current objective is a policy of
inflation targeting aimed at maintaining the annual inflation rate at between "2-3 per cent, on average, over the
cycle". This target was first set in 1993 by the then Reserve Bank Governor
Bernie Fraser and was then formalised in 1996 by the
Treasurer Peter Costello and incoming Reserve Bank Governor Ian Mcfarlane.
Before
1961, the functions of the Reserve Bank were performed by the Note Issuing Branch of the Commonwealth Bank. The Commonwealth Bank continued to exist as a government operated retail and commercial bank (until it was
privatised in the early
1990s), whilst the Reserve Bank offers no such services.
The Reserve Bank's board of directors consists of the Governor of the Reserve Bank, Deputy Governor of the Reserve Bank and Secretary to the Treasury as well as 6 external members appointed by the Treasurer. Excluding changes in the number of directors, the structure of the board of directors has remained unchanged since 1951.
The current members of the board of directors are:
*
Ian Macfarlane, Governor (Retired)
*
Glenn Stevens,
Governor* Ken Henry, Secretary to the Treasury
*
Hugh Morgan*
Jillian Broadbent*
Donald McGauchie*
Warwick McKibbin* Roger Corbett
* vacant chair since the retirment of
Frank Lowy in December 2005
The board normally meets in Sydney nine times each year, on the first Tuesday of each month, except January. Each year one meeting is held in
Melbourne. Generally one other meeting is held in a centre other than Sydney.
| Governor of the Reserve Bank of Australia | Term as Governor |
| Glenn Stevens | September 2006 â€" |
| Ian Macfarlane | September 1996 â€" September 2006 |
| Bernie Fraser | September 1989 â€" September 1996 |
| RA Johnston | August 1982 â€" July 1989 |
| HM Knight | July 1975 â€" August 1982 |
| JG Phillips | July 1968 â€" July 1975 |
| Herbert "Nugget" Coombs | January 1960 â€" July 1968 |
| Governor of the Commonwealth Bank of Australia | Term as Governor |
| Herbert "Nugget" Coombs | January 1949 â€" January 1960 |
| HT Armitage | July 1941 â€" December 1948 |
| H Sheehan | February 1938 â€" March 1941 |
| EC Riddle | October 1926 â€" February 1938 |
| J Kell | October 1924 â€" October 1926 |
| DSK Miller | June 1912 â€" June 1923 |
*
Australian dollar*
Central bank*
Royal Australian Mint*
Note Printing of Australia*
Reserve Bank of Australia*
Museum of Australian Currency Notes
