Michele Bullock's challenges at the RBA go far beyond interest rates
Michele Bullock steps up as RBA Governor today. In her first speech in her last role, she identified three potential sources of systemic risk for the financial system.
When Michele Bullock took her last job as assistant governor of the Reserve Bank’s financial system in 2017 she asked herself a critical question. It had been 10 years since the Global Financial Crisis. Had the way the RBA looked at financial stability actually changed since the chaos of 2007/08?
It was this question she looked to delve into for her first speech in that role, at a Bloomberg event in 2017.
In the speech, she explained that before the GFC hit the dominant economic school of thought believed it wasn’t possible to detect asset price bubbles in advance and “it was better to clean up after” they popped than to intervene earlier to deflate them.
But following the crisis, there had been a shift in thinking on this issue. "There is now more acceptance of the need to take action when system-wide risks are rising," she said.
