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RESERVE BANK BOARD
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The role, responsibilities and composition of the Reserve Bank Board are laid down in the Reserve Bank Act 1959. Over and above the legislated requirements and in recognition of their responsibility for maintaining a reputation for integrity and propriety on the part of the Board and the Reserve Bank, members have adopted a Code of Conduct.
Role of the Reserve Bank Board
The "mandate" or "charter" of the Reserve Bank Board is contained in section 10(2) of the Reserve Bank Act:
" …the Reserve Bank Board has power to determine the policy of the Bank in relation to any matter, other than its payments system policy, and to take such action as is necessary to ensure that effect is given by the Bank to the policy so determined.
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 under this Act and any other Act, other than the Payment Systems (Regulation) Act 1998 and the Payment Systems and Netting Act 1998, 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."
The main focus of discussions at the Reserve Bank Board's meetings each month is on monetary policy. This discussion occurs against the background of papers prepared by Reserve Bank of Australia (RBA) staff about developments in the domestic and foreign economies, and in financial markets. These papers are supplemented by staff presentations at each Board meeting.
The relationship of the Reserve Bank Board with the Government is set out in section 11 of the Reserve Bank Act. Thus, the "Government is to be informed … from time to time, of the Bank's monetary and banking policy". In practice this is done in the regular, generally monthly meetings which the Governor and Deputy Governor have with the Treasurer, shortly after each meeting of the Reserve Bank Board.
The Commonwealth Authorities and Companies Act specifies that the Board must prepare an annual report, for presentation to the Treasurer and tabling in Parliament.
In addition to the Reserve Bank Board, the RBA has another board, the Payments System Board, which is responsible for the RBA's payments system policy.
Meetings of the Reserve Bank Board
The Reserve Bank Board normally meets eleven times each year, on the first Tuesday of each month, except January. Each year, at least one meeting is held in Melbourne, usually in the first half of the year, and from time to time the Board also meets in other Australian capitals.
Five members form a quorum for a meeting of the Board, which must be chaired by the Governor or, in his absence, the Deputy Governor. The Act provides for decisions to be reached by a majority of the votes of the members present, with the Chairman also having a casting vote. In practice, the Board usually achieves a consensus without the need for formal voting. Minutes of the monetary policy meetings of the Board are published two weeks after each meeting. The Governor and Deputy Governor do not participate in deliberations of the Board related to the terms and conditions of their employment. Meetings are held in the Boardroom of the Reserve Bank’s Head Office in Sydney or a similar facility in one of the Bank’s Regional Offices when meetings are held interstate. They commence at 9.00 am and generally run for a little over three hours, and conclude with a light lunch to which a guest is invited from time to time.
Members of the Reserve Bank Board
The Reserve Bank Board comprises nine members: three ex officio members – the Governor (who is Chairman), the Deputy Governor (who is Deputy Chairman) and the Secretary to the Treasury – and six external members, who are appointed by the Treasurer. The Governor and Deputy Governor are appointed for terms of up to seven years, and are eligible for reappointment. The external members are appointed for terms of up to five years. A list of previous and current members of the Reserve Bank Board is also published on this website.
In terms of section 17(1) of the Reserve Bank Act, members of the Board may not be a director, officer or employee of an authorised deposit-taking institution for the purposes of the Banking Act 1959.
The current members of the Reserve Bank Board are:
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John Akehurst Member since 31 August 2007 Present term ends 30 August 2012 Deputy Chairman – Coogee Resources Limited Director – CSL Limited Director – Securency International Pty Ltd Director – University of Western Australia Business School |
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Jillian Broadbent AO Member since 7 May 1998 Present term ends 6 May 2013 Director – Coca-Cola Amatil Limited Director – Special Broadcasting Service |
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