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A Brief History

In 1911, legislation established the Commonwealth Bank of Australia. In 1959, this original
body corporate was preserved as the Reserve Bank of Australia (RBA) in legislation,
specifically to carry on the central banking functions; at that same time, the commercial and
savings banking functions were transferred into a new institution, which carried on the old
name of Commonwealth Bank of Australia.

With the Federation of the Australian States into the Commonwealth of Australia, the
Australian Parliament assumed power to make laws with respect to banking and currency. In
1911, the firstCommonwealth Bank Act gave the Bank only the ordinary functions of
commercial and savings banking; the Bank did not specifically have a central banking remit
and it was not responsible for the note issue. Management of the Bank was vested in the
Governor. The Bank opened for business in mid 1912. At that time, the note issue was
administered by the Australian Department of the Treasury, which had taken it over from the
private trading banks and the Queensland Government.

In 1920, responsibility for the note issue was transferred from the Treasury to a Notes Board
(consisting of four members, appointed by the Government). The Governor of the Bank
was ex officio a member of the Notes Board. The administration of the note issue was
undertaken by the Bank, though the Bank and the Notes Board were formally independent of
each other.

In 1924, the Commonwealth Bank Act was amended and the Bank was given control over
the note issue. Management was then vested in a board of eight directors, including ex
officio the Governor and the Secretary to the Treasury. From this time until 1945 (when there
were major changes to the legislation), the Bank gradually evolved its central banking
activities, initially in response to the pressures of the Depression in the early 1930s and later
by formal, albeit temporary, expansion of its powers under wartime regulations. These
included exchange control and a wide range of controls over the banking system (including
authority to determine advance policy and interest rates, and to require private banks to
lodge funds with it in special accounts).

The new Commonwealth Bank Act and the Banking Act, both of 1945, formalised the Bank's
powers in relation to the administration of monetary and banking policy, and exchange
control. Under the 1945 legislation, there ceased to be a board, which was replaced by an
advisory council of six, comprising entirely officials from the Bank and the Treasury; the
legislation specified that the Governor was responsible for managing the Bank. However,
legislation in 1951 established a new board (at that time of ten members), including the
Governor, Deputy Governor and the Secretary to the Treasury, and maintained the
responsibility of the Governor for managing the Bank. With minor variations in the number of
members, this has been the structure of the Bank's Board since that time.
As indicated above, the Reserve Bank Act 1959 preserved the original corporate body, under
the new name of the Reserve Bank of Australia, to carry on the central banking functions of
the Commonwealth Bank, which had evolved over time; other legislation separated the
commercial banking and savings banking activities into the newly created Commonwealth
Banking Corporation. The Reserve Bank Act 1959 took effect from 14 January 1960.

There were no major changes in the functions of the RBA until the abolition of Exchange
Control following the float of the Australian dollar in 1983. There had, however, been a
gradual movement to market-oriented methods of implementing monetary policy, away
from a system of direct controls on banks, and in the five years following the appointment of
a major financial system inquiry (the Campbell Committee, in 1979), the Australian financial
landscape was transformed to a virtually fully deregulated system. At the same time, the
RBA gradually built up a specialised banking supervision function.

Another inquiry into the Australian financial system (the Wallis Committee) was announced
in 1996. There were two major outcomes of this inquiry for the Bank, both taking effect from
1 July 1998. The banking supervision function was transferred from the RBA to a newly
created authority, the Australian Prudential Regulation Authority, which was to be
responsible for the supervision of all deposit-taking institutions. The Reserve Bank Act was
amended also to create a new Payments System Board, with a mandate to promote the
safety and efficiency of the Australian payments system. New legislation the Payment
Systems (Regulation) Act 1998 and the Payment Systems and Netting Act 1998 was
introduced, giving the Bank relevant powers in this area.

A further inquiry into the Australian financial system was announced by the new
Government late in 2013. The terms of reference are broad-ranging, covering aspects such
as: the consequences of developments in the Australian financial system since the 1997
inquiry and the global financial crisis; the philosophy, principles and objectives underpinning
the development of a well-functioning financial system; and the emerging opportunities and
challenges that are likely to drive further change in the global and domestic financial
system. The Reserve Bank made a detailed submission to the Financial System Inquiry in
March 2014.

The Reserve Bank Board's obligations with respect to the formulation and implementation of
monetary policy are laid out in the Reserve Bank Act. Section 10(2) of the Act, which is often
referred to as the Bank's 'charter', says:
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 1993, the objective of price stability was outlined publicly by the then Governor, Bernie
Fraser, as a rate of inflation which was held to an average of 2-3 per cent over a period of
years. [The history of the RBA's initial inflation targeting was given in a speech by Glenn
Stevens in 1999, 'Six Years of Inflation Targeting'.]

In August 1996, the then Governor-designate of the Reserve Bank, Ian Macfarlane, and the
then Treasurer, Peter Costello, jointly issued a Statement on the Conduct of Monetary Policy,
which essentially reiterated and clarified the respective roles and responsibilities of the
Reserve Bank and the Australian Government in relation to monetary policy and provided
formal Government endorsement of the Reserve Bank's inflation objective, which had been
in place informally for several years. Revised, though essentially unchanged, statements
were published in July 2003 and September 2006. In December 2007, following the change
of Government, a newStatement on the Conduct of Monetary Policy was jointly issued by the
then Treasurer, Wayne Swan MP, and the Governor of the Reserve Bank, Glenn Stevens. This
Statement did not change the policy objectives of the Reserve Bank as outlined in the earlier
statements, but incorporated substantive amendments relating to the independence of the
Reserve Bank and covering practices regarding transparency and communication. A
revised Statement on the Conduct of Monetary Policy was issued following the 2010
election, which explicitly covered the Reserve Bank's mandate for financial stability.

With the change in Government in October 2013, a new Statement was jointly issued by the
Treasurer, Joe Hockey MP, and the Governor, Glenn Stevens. As in the past, the centrepiece
of the current Statement remains the inflation targeting framework, which has formed the
basis of Australia's monetary policy framework since the early 1990s.

Company Profile
Sector: Government

Industry: Central Bank

Sub-Industry: -

Reserve Bank of Australia operates as a central bank of Australia. The Company conducts monetary
policy, works to maintain a strong financial system and issues the nation's banknotes.

Key Executives
Glenn R Stevens

Philip Lowe

Deputy Chair/Deputy Governor

Guy Debelle

Asst Governor:Financial Markets

Malcolm Edey

Asst Governor:Financial

Christopher Kent

Asst Governor:Economic

Frank Campbell

Asst Governor:Corp Services

Robert Middleton Jones

Chief Financial Officer

Sarv Girn

Chief Information Officer

Anthony Dickman


Peter Stebbing

Deputy Secretary

Catherine Parr

General Counsel

Peter Jones

Deputy General Counsel

Luci Ellis

Head:Financial Stability

Darryl Ross

Head:Audit Department

Lindsay Boulton

Head:Banking Department
Greg Johnston

Head:Payments Settlements

Grant Baldwin

Head:Facilities Mgmt

Michael Andersen

Head:Note Issue

Jonathan Kearns

Head:Economic Analysis

John Simon

Head:Economic Research Dept

Chris Aylmer

Head:Domestic Markets

Chris Ryan

Head:International Dept

Tony Richards

Head:Payment Policy

Melissa Hope

Head:Human Resources

Jacqui Dwyer

Head:Information Department

Michelle McPhee

Head:Risk Management Unit

Merylin Coombs

Deputy Head:Financial Stability

Carl Schwartz

Deputy Head:Financial Stability

Paul Phibbs

Deputy Head:Banking Department

Stephanie Connors

Deputy Head:Banking Department

David Brown

Deputy Head:Payments Settlements

Peter Gallagher

Deputy Head:Payments Settlements

Keith Drayton

Deputy Head:Note Issue

Ellis Connolly

Deputy Head:Economic Analysis

Michael Plumb

Deputy Head:Economic Research

Marion Kohler

Deputy Head:Economic Analysis

David Orsmond

Deputy Head:Economic Analysis

Matthew Boge

Deputy Head:Domestic Markets

James Holloway

Deputy Head:International Dept

James Whitelaw

Deputy Head:International Dept

Darren Flood

Deputy Head:Payments Policy

Mark Manning

Deputy Head:Payment Policy

Board Members


Glenn Stevens Reserve Bank

of Australia



Philip Lowe Reserve Bank

of Australia


John Akehurst Transform

Exploration Pty

Kathryn Fagg Melbourne

Recital Centre

Heather Ridout AustralianSuper

Pty Ltd

Catherine Tanna EnergyAustralia

Holdings Ltd