Fifty Years of the Reserve Bank
The Reserve Bank of Australia commenced operations as Australia’s central bank on 14 January 1960. This was the culmination of a long journey towards central banking, which had begun much earlier. The full story is told in a monograph prepared for the anniversary by Professor Selwyn Cornish of the Australian National University.1
Central banking functions had historically been carried out by the Commonwealth Bank of Australia. A publicly owned commercial bank since its inception in 1911, the Commonwealth Bank had progressively assumed wider central bank responsibilities from the 1920s. By the 1950s, however, it was no longer tenable for the central bank to both regulate and compete with the private banks. Therefore, the Reserve Bank was established to continue the central banking activities, while the commercial functions were placed in the Commonwealth Banking Corporation, which in time became the CBA as we know it today.
On 14 January 1960, when the Reserve Bank opened for business it had 1,800 staff from the Commonwealth Bank, including the Governor, Dr H.C. ‘Nugget’ Coombs. The Reserve Bank also maintained the same board and, importantly, the same charter.
The words in the charter remain the focus of the modern Reserve Bank, and are inscribed on the wall of the Reserve Bank’s Head Office building in Sydney. They charged the Bank with the obligation to conduct policies as best to contribute to:
- the stability of the currency of Australia;
- the maintenance of full employment in Australia; and
- the economic prosperity and welfare of the people of Australia
Today, this is given practical expression in a target for consumer price inflation, of 2–3 per cent per annum over the cycle.
The Reserve Bank is celebrating its anniversary in a number of ways. A ‘photographic wrap’ around the exterior windows of the Head Office building in Sydney’s Martin place records the establishment of the national institutions of the Commonwealth Bank and the Reserve Bank, and the financial events in which they were involved, through images from the Reserve Bank’s extensive photographic collection. Reflections of Martin Place will remain in place for the entire anniversary year. A new exhibition titled Hidden History of Banking: Notable Convicts has been added to the Museum of Australian Currency Notes. It draws on convict banking records held by the Reserve Bank, and looks at the relationship between convicts and money. An exhibition of the Bank’s artworks and sculpture will open mid-year in the Banking Chamber of Head Office. It will explore the idea of modernism as it relates to the Head Office building, its design and values. In February 2010, the Reserve Bank held a high-level 50th Anniversary Symposium attended by overseas central bank governors, leading academics and economists to discuss ‘what policy makers have learned over recent decades and what needs to be reconsidered’.
Martin Place Watercolour
Gallery Planned for Progress Knighthood of Sir Denison Miller, 1920
- The Evolution of Central Banking in Australia, by Selwyn Cornish, Reserve Bank of Australia, Sydney, 2010. Available on request through the Reserve Bank at email@example.com.