The Australian Banking Association has recommended that the government consider establishing a dual board structure for the operation of the Reserve Bank – a corporate governance board and a monetary policy board.

The Review of the Reserve Bank of Australia, which was established by the Treasurer in July and will report next March, has already raised the prospect of a separate monetary policy board, made up of monetary policy experts and economists, that would be distinct from the current RBA board.

In an issues paper released in September, the review panel pointed to the fact that a number of central banks have separate monetary policy boards.

Under the ABA’s proposal, the corporate governance board would have an independent chair and have remuneration and audit and risk sub-committees.

The monetary policy board would continue to execute on monetary policy. A small number of board members would sit on both boards.

The monetary policy board would include monetary policy experts from outside the RBA as voting members. Other members would include people with “deep work experience” of the real economy.

More generally, the ABA supports the current objectives of the RBA and its inflation target.

It suggested that the RBA could improve its communications by adopting the practice of the US Federal Reserve, which publishes the votes of members of the Federal Open Market Committee on cash rate and other decisions.