Focus and fortune in RBA review

Ian Rogers
RBA

RBA reviewer Carolyn Wilkins

The long-awaited report of the review into the Reserve Bank of Australia will be released this morning.
 
Hopefully, the report of the review led by Carolyn Wilkins led will be a blast. The consensus seems to be that it may not be.
 
Treasurer Jim Chalmers has said the review made 51 recommendations and today he will say the government accepts all in principle, the AFR reports.
 
A second RBA Monetary Policy Board of 'experts' (akin to the approach in New Zealand and other places) will be formed and the role of the RBA board will be relegated to oversight, risk and governance.
 
The main RBA board will be expanded by two. As it happens, two routine new appointments to the board will be announced today, the AFR reports.
 
Presumably Philip Lowe, the RBA governor and his board will be called out for their errant forward guidance on the cash rate during the pandemic. This topic will be the populist focus of most media scrutiny.
 
Chalmers told a media briefing a couple of days ago that some elements will need legislative change. 
 
The terms of reference carved out reviewing the activist role of the RBA in payments policy and payments regulation, so Wilkins’ review is unlikely to consider the 25-year legacy of the (Wallis Inquiry-inspired) structure of the present model of dual boards – the second being the Payments System Board.
 
This is a pity.
 
Might the Payments System Board be surplus to requirements, given the federal government's wider review of payments strategy? Or might it be detached from the RBA one day?
 
Carolyn Wilkins, the former deputy governor of the Bank of Canada and her two Canberra insider colleagues who compiled this review no doubt have insight on the dual boards at the Reserve Bank. Hopefully we will be hearing plenty on this topic in time.
 
Lowe, the governor, will hold a media briefing at noon today, including a rare Q&A.

These will be a frequent occurrence, with the review calling for the governor to hold a media briefing each month following the monetary policy decision.