As the second five year term of current RBA governor Glenn Stevens winds up, it's more than likely that an outsider, rather than an obvious insider candidate, will be selected as the next governor of the Reserve Bank of Australia.
Stevens' term ends in mid September 2016, an awkward date given the timetable of election options. He's expected to retire, or near enough.
If there is any assumption of an escalator of inside appointments, with the list of prospects headed by the deputy governor Philip Lowe, Banking Day doubts this is anywhere near the most likely scenario.
That's what we're starting to hear and it fits with our own perception, so here goes… the Banking Day market for the next governor of the RBA, leading with our tip on a probable pick, then stretched for editorial entertainment.
Starting with David Gruen - now deputy secretary on economic matters at the Department of Prime Minister and Cabinet.
Gruen (pictured, right.
Source: CEDA) served in a similar job at Treasury after a long career at the RBA as one of the many bright young things
David_Gruen-110pxW_150pxH
with prospects and a yen for macroeconomic and monetary policy analysis. He is from a distinguished family of economists enthusiastic about, and sharing in, the work of public policy making.
One national newspaper confidently reported in early 2015 that Gruen was to be the new Australian Statistician. Instead he turned up at PM&C.
If David Gruen or any other outsider walks into Martin Place, their superlative credentials will only be one rationale.
One strand of thinking in the decision making of a Turnbull or Shorten, Morrison or Bowen and their advisers has to be the lack of any credible sanction on the board of the Reserve Bank Australia for its careless and damaging management of Securency, half owned through Note Printing Australia.
One key criminal trial is underway in the UK in connection with this bribery saga, with more queued up in Australia.
Responsibility begins and ends at the top. Glenn Stevens will be departing as RBA governor after ten years with a compromised reputation.
Are the RBA hierarchy set for an outsider? And is knowledge of a thwarted career progression - one that echoes all the way down to the latest graduate intake - widespread?
How many leading names and lower ranks will be working on their CVs and making career plans in the private and social sectors?
A lot.
Second on our list is Martin Parkinson, now permanent head of the Department of Prime Minister and Cabinet. Australia's Secretary to the Treasury from March 2011 to December 2014, Parkinson followed Ken Henry, now chair of NAB. He served Wayne Swan, Chris Bowen and Joe Hockey.
If Parkinson is writing a brief for his boss, the Australian PM (whether that be Shorten or Turnbull) on the merits of putting a top tier PM&C macroeconomist into the post of Reserve Bank governor he'd be doing all a favour if he proposed himself. It worked for Dick Cheney heading a US vice presidential hunt.
Third, let's try Graeme Wheeler, governor of the Reserve Bank of New Zealand. He succeeded Alan Bollard in this role on 26 September 2012.
From 1984 to 1990 Wheeler (pictured, left.
Source: RBNZ) was economic and financial councillor for the New Zealand delegation to the Organisation for Economic Co-operation and Development, eventually becoming director of macroeconomic policy at the New Zealand Treasury in 1990. In 1997, he went to work for the World Bank Group, firstly as director of the Financial Products and Services Department. From 2006 to 2010 he was managing director of operations at the World Bank.
Ok, we made this one up and our key NZ contacts do not make much of this conjecture. But if he is not on John Fraser's and Martin Parkinson's shortlist, Wheeler needs to be.
Wheeler, it must be said, has credentials other candidates cannot match. A serious outsider able to supply the fresh insight the RBA may badly need, given the wayward oversight of the note printing division.
He has a bright feather in his cap, with the best record of anybody for framing monetary policy in the public interest.
Unlike in Australia, low recorded inflation and low projected inflation in New Zealand is one impetus for a reset of NZ monetary policy this year. In doing so, Wheeler is abiding by an established credo.
Graham Wheeler may prove a wild card successor to Glenn Stevens.
Fourth, John Fraser, the present Secretary to the Treasury in Australia, an econocrat said to be a particular pick of former Prime Minister Tony Abbott. Fraser's appointment to Treasury stands out as one of Abbott's better decisions as PM.
Fraser worked for the Australian Treasury from the early 1970s, including two international postings to Washington DC, firstly at the International Monetary Fund and then as Economic Minister at the Australian embassy. His most senior post was Deputy Secretary (Economic) of the Department of the Treasury.
Fraser joined the UBS Group in Australia in 1993 and was named head of Asia Pacific for the Business Group in 1999. From 1994 to 1998 he was executive chairman and CEO of Swiss Bank Corporation's division SBC Australia Funds Management Ltd. In these posts Fraser was a favourite of local business media.
From December 2001 until December 2013 Fraser was chair and CEO of UBS Global Asset Management.
From this vantage point Fraser brings unparalleled understanding of the great recession and the muddle that episode engendered in Australia.
But Fraser has much to do at Treasury and it's a better job anyway. He can also brush up his RBA governor options later as successor to Gruen, Parkinson or Wheeler, should it hold any interest.
Fifth and sixth, a couple of banking buddies.
Allan Moss. The former Macquarie Bank managing director walked onto the RBA board in late 2015 with barely a murmur of comment. Commercial bank CEOs are an unusual choice for a Reserve Bank board, at least in Australia. The pick was controversial and a busy banking media pack let the selection pass with minimal analysis or comment.
Moss might be in training on the RBA board, getting set to direct proceedings in place of Glenn Stevens.
Written this way, Moss is not a bad choice at all.
The next is David Murray, former managing director of Commonwealth Bank of Australia and then chair of the country's Future Fund. Most recently chair of the five person panel that ran the recent Financial System Inquiry and a place holder on the payroll of consultants Oliver Wyman.
Some, seemingly serious, commentary on the back story to the Financial System Inquiry theorised that David Murray was a prospective candidate for RBA governor. That history leads Murray onto this list.
Via the Financial System Inquiry Murray has made his final mark on Australian banking. If he's a bolter for RBA governor, you could only infer Canberra thinking was misaligned.
Second last, Philip Lowe - the conventional pick, or guess, as next governor of the Reserve Bank Australia.
Deputy governor since February 2012, Lowe (pictured, right.
Source: RBA) is chair of the Reserve Bank's Risk Management Committee.
The RBA bio also tells us that, prior to his current role, Lowe held the positions of Assistant Governor (Economic) and Assistant Governor (Financial System). He also spent two years with the Bank for International Settlements working on financial stability issues. In keeping with need and tradition, Lowe is the author of a deluge of important studies.
He's also a reliable, regular spokesman for his boss.
Lowe must have played a guiding hand in entrenching the unduly severe monetary policy that is the present hallmark of the Reserve Bank Australia, in fact the best reason to back away.
If Lowe walks in as the next RBA governor, the governance of Australia's central bank will be all wrong. We're referring to the choices of Canberra decision makers when we say this.
Lowe, many will agree, has the CV and some moral high ground. But not enough. It may be that a long cohort of RBA executives shares in the compromised reputation of Glenn Stevens, thanks to the Securency scandal.
And last, there is the deep RBA management bench. Solid and credible names pepper the management ranks at the Reserve Bank Australia.
How widely must the blame for Securency be shared? Must it cruel the careers and reputation of many?
If not, the most significant of the RBA's senior staff may yet get to strut as a future RBA governor. Selecting names from the management ranks of future RBA CEOs produces some interesting choices.
Walk one of these people past Phil Lowe as RBA governor; it may deliver enough of a signal and be less unsettling than any of the half a dozen ranked ahead of Philip Lowe in this list.
It's just hard to see this as any more likely than Lowe. At least there are options.
In kind of order, the most obvious pair:
Guy Debelle, Assistant Governor (Financial Markets) and a long shot alternative when Stevens replaced Ian Macfarlane in 2006.
Lowe, exhibiting the institutional conservatism at the RBA, made deputy ahead of Debelle four years ago.
Debelle slaved to coproduce many pillars of the deft Australian fix to what locals opted to label the global financial crisis. He is one of the central operational executives of the RBA and has been for years.
He knows as well as anybody where many of the most disturbing bodies are buried around Australian banking.
His local knowledge may prove telling as the CEO of the RBA.
Of the insiders at the RBA, he'd be an optimum pick, but maybe not the only one.
Christopher Kent, the Assistant Governor (Economic) at the Reserve Bank since 2012 has a CV screaming RBA governor in training.
On the RBA payroll since 1988 - some years before graduating with economics honours from the Australian National University in 1991 - Kent is a stereotypical product of the RBA talent spotting and career preparation machine that is one of the better facets of Reserve Bank culture.
Kent did not take long to make head of Economic Research Department, a stepping stone for prior RBA governors.
Now responsible for the Bank's Economic Analysis and Economic Research departments, Kent gets to prioritise what fellow senior staff and the board read. He is the chief economic advisor to the governor and the board, the RBA website recites.
For a stretch in the noughties, Kent served as head of the Payments Policy Department, no doubt a learning curve in stakeholder relations in a fussy sector his employer and predecessors opted to make a field of activist public policy. Kent stuck to the party line by and large, more a minus than a plus when drawing out a public sector leader.
If he's governor material, Christopher Kent might have credence right away.
The bottom line: Banking Day cannot fall into line with any received wisdom that an orderly progression is likely in the Glenn Stevens succession stakes.
A critical public sector institution desperately needs to reorient. Too many of the present management and board allowed criminal conduct to flourish in a much hyped business line that was a centrepiece of one RBA core activity, producing banknotes.
If it's David Gruen or any of our top four, public policy making in banking in Australia will be on course.