The Reserve Bank of Australia (RBA) is Australia's central bank and banknote issuing authority. It has had this role since 14 January 1960, when the Reserve Bank Act 1959 removed the central banking functions from the Commonwealth Bank.
The RBA also provides services to the Government of Australia and services to other central banks and official institutions. The structure of the Reserve Bank Board has remained consistent ever since 1951, with the exception of the change in the number of members of the board.
Roles and responsibilities
The Reserve Bank is currently governed by the Reserve Bank Act 1959.
In practice the Reserve Bank concentrates on the first objective, that is to control inflation through monetary policy. 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 then-Treasurer Peter Costello and incoming governor Ian McFarlane. The Governor chairs both the Reserve Bank Board and the Payments System Board and resolves any disputes between them.
The RBA governor is required by the Reserve Bank Act 1959 to keep in contact with the Treasury on matters concerning both the Treasury and Reserve Bank and vice versa. It also mandates that the RBA board inform the government of the bank's monetary and banking policy, which is often accomplished through the governor's meetings with the Treasurer. Since 1996, the governor and other senior members of the RBA have appeared twice annually before the House of Representatives Standing Committee on Economics to explain the conduct of the bank.
List of Governors
{| class="wikitable"
| style="background:#dfd;"|*
|Died in office
|}
{| class="wikitable"
|-
! #
! Governor
! Post-nominals
! Start
! End
! Ref
|-
| colspan="18" style="text-align:center; background:#000;"|<span style="color:yellow">Governors of the Commonwealth Bank of Australia</span>
|-
| 1
| style="background:#dfd;"Sir |Denison Miller
|
| June 1912
| June 1923
| style="text-align:center;"|
|-
| 2
| James Kell
|
| October 1924
| October 1926
| style="text-align:center;"|
|-
|4
| style="background:#dfd;"|Sir Henry Sheehan
|
| February 1938
| March 1941
| style="text-align:center;"|
|-
| 5
| Hugh Armitage
|
| July 1941
| December 1948
| style="text-align:center;"|
|-
| 6
| H. C. Coombs
|
| January 1949
| January 1960
| style="text-align:center;"|
|-
| colspan="18" style="text-align:center; background: #00f;"|<span style="color:white">Governors of the Reserve Bank of Australia</span>
|-
| 1
| H. C. Coombs
|
| January 1960
| July 1968
| style="text-align:center;"|
|-
| 3
| Sir H. M. Knight
|
| July 1975
| August 1982
| style="text-align:center;"| This made Bullock the RBA's first female Governor.
Members of the Payments System Board are defined by Section 25A of the Reserve Bank Act 1959, with three of the members being ex officio or representatives of another organisation. The governor of the Reserve Bank of Australia is the Chair of the Payments System Board, there is one representative of the RBA, and there is one representative of the Australian Prudential Regulation Authority (APRA). In addition, there are up to five other members of the board who are appointed by the Treasurer for a term of up to five years. The board meet once per quarter, usually in Sydney with five members forming a quorum, which must be chaired by the Governor or, in their absence, the Deputy Chair. The Chair of the RBA meets with the Chair of the ACCC at least once annually on issues of interest to both parties in the payments system, in addition to members of both organisations consulting over issues that are mutually important.
Mid-19th century–1924
thumb|upright|right|[[Prime Minister of Australia|Prime Minister Andrew Fisher's government created a commercial bank owned by the government, but not a central bank.]]
Proposals for a national bank in Australia were first raised in the mid-19th century, and got a significant boost in the 1890s as a result of the Australian banking crisis of 1893 during which many commercial banks and building societies collapsed, leading to a general economic depression. The Australian Labor Party, formed during this period, proposed a bank which would be a protected and cheap way of providing financial services. The party's platform for the 1908 election was for a "Commonwealth Bank", which would have both commercial and central bank functions.
The Australian Notes Board (ANB) was created in 1920 and partially acceded to Miller's request, in having four directors, with the governor of the bank being an ex officio member.
The Treasurer and Country Party Leader Earle Page wanted to end the monetary contraction which particularly hurt his farming constituents, who were as a result receiving reduced export prices. The monetary policy of the bank from 1931 until the early 1970s had been to maintain a stable exchange rate with the pound sterling.
In January 2026, the central bank raised key interest rate for the first time in 2 years to 2.58% due to unexpectedly high inflation and unemployment hit a seven-month low in December.
Securency scandal
Since 2007, the RBA's reputation has been affected by the 'Securency' or Note Printing Australia scandal. These RBA subsidiaries were involved in bribing overseas officials so that Australia might win lucrative polymer note-printing contracts. Australian press coverage, which continued into late 2011, reflects concerns with the apparent laxity and tardiness of corrective actions undertaken by relevant RBA board members and officials. The matters were not reported to the Federal Police in 2007, although they have been since, while in 2011 it was revealed that the RBA had to correct inaccurate evidence previously given to parliamentary committees. Former senior executives were charged with foreign bribery offences under the Criminal Code Amendment (Bribery of Foreign Public Officials) Act 1999. In these proceedings, two of the executives were represented by William "Bill" Doogue. Ultimately, no one received a custodial sentence for these charges.
In July 2014, WikiLeaks released a copy of a court order prohibiting publication throughout Australia of information that "reveals, implies, suggests or alleges" corruption involving specifically named past and present high-ranking Malaysian, Indonesian and Vietnamese officials in relation to the Note Printing Australia bribery allegations.
Heritage listings
thumb|right|[[Reserve Bank of Australia Building, Canberra]]
The following Reserve Bank buildings are included on the Australian Commonwealth Heritage List:
- 20-22 London Circuit, Canberra: Reserve Bank of Australia Building, Canberra
- 65 Martin Place, Sydney: Reserve Bank of Australia Building, Sydney
See also
- Australian dollar
- Australian Prudential Regulation Authority
- Bank Notes Tax Act 1910
- Banking in Australia
- Central bank
- Note Printing Australia
- Official cash rate
- Royal Australian Mint
- List of central banks
- Bank of International Settlement
Notes
- Members are eligible to be appointed to another term.