Another former governor is concerned about the RBA overhaul
At least two former leaders of the central bank are concerned that proposed changes, set to be legislated in coming months, go too far.
Former Reserve Bank governor Bernie Fraser has privately expressed concerns about sweeping changes to the central bank’s governance and the way it sets official interest rates.
Fraser’s concerns, which have been conveyed to RBA insiders, mean that at least two of the rate setting institution’s former leaders have misgivings about the proposed overhaul of the bank, which the government is set to legislate in coming months.
Under the changes, which follow an extensive review of the RBA commissioned by Treasurer Jim Chalmers, a separate monetary policy board would be established to set interest rates, with the current board's focus shifting to oversight of the institution as a whole. The new board would likely have a similar structure to the existing board, with seats reserved for the governor, deputy governor, Treasury Secretary and six external members.
But the external members would mainly be professional economists with specific expertise in monetary policy as opposed to the current mix of economists with broad backgrounds and business directors.
