Reserve Bank of Australia (RBA) Governor Philip Lowe pushed back against criticism of the central bank’s rate-setting board by an external panel and reiterated that he is willing to remain at the helm if offered an extension of his term.
An independent review of the bank released yesterday recommended creating a new monetary policy board to help align it with international counterparts.
The report found the current structure provides only “limited challenge” to the views of senior RBA officials.
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Lowe welcomed all 51 recommendations, while saying that the review’s “description of how the board process works and the challenge in the boardroom that the panel has doesn’t particularly resonate with me.”
All nine members are “deeply engaged” in decisionmaking and bring a “great deal of expertise to the issues,” Lowe said, adding that the members “are probing, they challenge me and sometimes I speak last in the meetings.”
The board’s composition has drawn criticism as it includes only one economist among six independent directors who are mainly drawn from business — leaving them ill-equipped to oppose the bank’s views.
Lowe, RBA Deputy Governor Michele Bullock and Australian Secretary of the Treasury Steven Kennedy round out the nine members.
“The idea that the board members sit there meekly and accept the recommendations that I put to them is very far from the reality that I have lived as the governor,” Lowe said.
However, the governor praised the review and pledged to work constructively with Australian Treasurer Jim Chalmers to implement the proposed changes.
Asked if he was hopeful of an extension after his current seven-year term ends in September, Lowe reiterated that he was willing to keep serving.
“If the government would like me to stay, I’m happy to stay,” he said. “But if they want to have someone else for the reasons you’re articulating, I’d perfectly understand that and have other things to do with my life.”
Chalmers earlier in the day restated his intentions to announce a decision on the governor in the middle of the year.
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