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.]] The Reserve Bank of Australia came into being on 14 January 1960 to operate as Australia
Australia

Australia, officially the Commonwealth of Australia, is a country in the southern hemisphere comprising the Australia of the world's smallest continent, the major island of Tasmania, and numerous list of islands of Australia in the Indian Ocean and Pacific Oceans....
's central bank
Central bank

A central bank, reserve bank, or monetary authority is the entity responsible for the monetary policy of a country or of a group of member states....
 and banknote issuing authority. The bank offers banking services to the Federal Government, and to licensed banks that participate in the payments system. It is headed by the Governor of the Reserve Bank, Glenn Stevens
Glenn Stevens

Glenn Robert Stevens is an Australian economist and the current Governor of the Reserve Bank of Australia.Stevens was born in Sydney in 1958....
.

predecessor to the Reserve Bank, the Commonwealth Bank of Australia, was established in 1911.






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.]] The Reserve Bank of Australia came into being on 14 January 1960 to operate as Australia
Australia

Australia, officially the Commonwealth of Australia, is a country in the southern hemisphere comprising the Australia of the world's smallest continent, the major island of Tasmania, and numerous list of islands of Australia in the Indian Ocean and Pacific Oceans....
's central bank
Central bank

A central bank, reserve bank, or monetary authority is the entity responsible for the monetary policy of a country or of a group of member states....
 and banknote issuing authority. The bank offers banking services to the Federal Government, and to licensed banks that participate in the payments system. It is headed by the Governor of the Reserve Bank, Glenn Stevens
Glenn Stevens

Glenn Robert Stevens is an Australian economist and the current Governor of the Reserve Bank of Australia.Stevens was born in Sydney in 1958....
.

History

The predecessor to the Reserve Bank, the Commonwealth Bank of Australia, was established in 1911. It was initially a commercial and savings bank. The Department of Treasury issued notes until 1924, when this responsibility was transferred to the Commonwealth Bank.

The Commonwealth Bank gradually gained more central banking activities until 1945, when new laws formalised its central banking powers. In 1960 the central banking functions of the Commonwealth Bank were transferred to the new Reserve Bank of Australia. The 1980s saw the abolition of Exchange Control as a result of the float of the Australian dollar and the creation of a banking supervision function for the Reserve Bank. This banking supervision function was then transferred to the newly created Australian Prudential Regulation Authority
Australian Prudential Regulation Authority

The Australian Prudential Regulation Authority is a statutory authority, and the prudential regulator of the Australian financial services industry....
 in 1998.

Roles and responsibilities

It is the duty of the Reserve Bank Board, within the limits of its powers, to ensure that the monetary and banking policy of the Bank is directed to the greatest advantage of the people of Australia and that the powers of the Bank ... are exercised in such a manner as, in the opinion of the Reserve Bank Board, will best contribute to:

(a) the stability of the currency
Currency

A currency is a Medium of exchange, facilitating the trade of goods and/or Service s. It is coins and paper bills used as money. It is one form of money, where money is anything that serves as a medium of exchange, a store of value, and a standard of value....
 of Australia
(b) the maintenance of full employment
Full employment

In macroeconomics, full employment is a condition of the national economy, where nearly all persons willing and able to work at the prevailing wages and working conditions are able to do so....
 in Australia; and
(c) the economic prosperity and welfare of the people of Australia.


In practice the Reserve Bank concentrates on the first objective, that is to control inflation
Inflation

In economics, inflation is a rise in the general price level of goods and services in an economy over a period of time. The term "inflation" once referred to increases in the money supply ; however, economic debates about the relationship between money supply and price levels have led to its primary use today in describing price inflatio...
 through monetary policy
Monetary policy

Monetary policy is the process by which the government, central bank, or monetary authority of a country controls the supply of money, availability of money, and cost of money or rate of interest, in order to attain a set of objectives oriented towards the growth and stability of the economy....
. (See also open market operation
Open market operation

Open market operations are the means of implementing monetary policy by which a central bank controls its national money supply by buying and selling government Security , or other financial instruments....
.) The current objective is a policy of inflation targeting
Inflation targeting

Inflation targeting is an economic policy in which a central bank estimates and makes public a projected, or "target," inflation rate and then attempts to steer actual inflation towards the target through the use of interest rate changes and other monetary tools....
 aimed at maintaining the annual inflation rate at between "2-3 per cent, on average, over the cycle
Business cycle

The term business cycle or economic cycle refers to economy-wide fluctuations in production or economic activity over several months or years, around a long-term growth trend....
". This target was first set in 1993 by the then Reserve Bank Governor Bernie Fraser
Bernie Fraser

Bernie Fraser is an Australian economist and was the Governor of the Reserve Bank of Australia of the Reserve Bank of Australia from September 1989 ? September 1996....
 and was then formalised in 1996 by the then Treasurer
Treasurer of Australia

The Treasurer of Australia is the minister in the Government of Australia and head of the Department of the Treasury , responsible for government expenditure and revenue raising....
 Peter Costello
Peter Costello

Peter Howard Costello is an Australian politician. He was Deputy Leader of the Liberal Party of Australia from 1994 to 2007, and served as Treasurer of Australia from 1996 to 2007, making him the longest serving treasurer in Australian history....
 and incoming Reserve Bank Governor Ian Mcfarlane.

Before 1961, the functions of the Reserve Bank were performed by the Note Issuing Branch of the Commonwealth Bank. The Commonwealth Bank continued to exist as a retail and commercial bank, and was privatised in the early 1990s, whilst the Reserve Bank offers no such commercial services, only transactional banking facilities to Commonwealth and State government departments and authorities.

Board of directors

The Reserve Bank's board of directors consists of the Governor of the Reserve Bank, Deputy Governor of the Reserve Bank and Secretary to the Treasury as well as 6 external members appointed by the Treasurer. Excluding changes in the number of directors, the structure of the board of directors has remained unchanged since 1951.

The current members of the board of directors are:
  • Glenn Stevens
    Glenn Stevens

    Glenn Robert Stevens is an Australian economist and the current Governor of the Reserve Bank of Australia.Stevens was born in Sydney in 1958....
    , Governor
  • Ric Battellino, Deputy Governor
  • Ken Henry, Secretary to the Treasury
  • Jillian Broadbent
  • Donald McGauchie
  • Warwick McKibbin
    Warwick McKibbin

    Warwick McKibbin is an Australian Professor of economics at the Australian National University who works across a wide range of areas in applied policy....
  • Roger Corbett
  • Graham Kraehe
  • John Akehurst


Meetings of the Reserve Bank Board

The board normally meets in Sydney eleven times each year, on the first Tuesday of each month, except January (when no meeting is held). One meeting each year is held in Melbourne, usually in the first half of the year . From time to time other meetings are held in other Australian Capitals.

Governors

The Governor of the Reserve Bank of Australia is the most senior position in the Reserve Bank of Australia. The Governor is appointed by the Treasurer for a term of up to seven years (reappointment for another term is possible).

Governor of the Reserve Bank of AustraliaTerm as Governor
Glenn Stevens
Glenn Stevens

Glenn Robert Stevens is an Australian economist and the current Governor of the Reserve Bank of Australia.Stevens was born in Sydney in 1958....
September 2006 –
Ian MacfarlaneSeptember 1996 – September 2006
Bernie FraserSeptember 1989 – September 1996
Robert Alan Johnston
RA Johnston

Robert Alan 'Bob' Johnston Order of Australia is an Australian economist and was the 4th Governor of the Reserve Bank of Australia....
August 1982 – July 1989
Sir Harold Knight
HM Knight

Sir Harold Murray Knight Order of the British Empire Distinguished Service Cross is an economist and was the 3rd Governor of the Reserve Bank of Australia....
July 1975 – August 1982
Sir John PhillipsJuly 1968 – July 1975
Dr. Herbert Coombs
H. C. Coombs

Herbert Cole Coombs , referred to in his professional life as Dr. H. C. Coombs but commonly known as "Nugget" Coombs, was an Australian economist and public servant....
January 1960 – July 1968
Governor of the Commonwealth Bank of AustraliaTerm as Governor
Dr. Herbert CoombsJanuary 1949 – January 1960
Sir Hugh ArmitageJuly 1941 – December 1948
Sir Henry SheehanFebruary 1938 – March 1941
Sir Ernest RiddleOctober 1926 – February 1938
James KellOctober 1924 – October 1926
Sir Denison MillerJune 1912 – June 1923


See also

  • Australian dollar
    Australian dollar

    The Australian dollar is the currency of the Commonwealth of Australia, including Christmas Island, Cocos Islands, and Norfolk Island, as well as the independent Pacific Islandss of Kiribati, Nauru and Tuvalu....
  • Australian Prudential Regulation Authority
    Australian Prudential Regulation Authority

    The Australian Prudential Regulation Authority is a statutory authority, and the prudential regulator of the Australian financial services industry....
  • Australian Bank Notes Tax Act 1910
    Australian Bank Notes Tax Act 1910

    The Bank Notes Tax Act of 1910 effectively ended the era of private currency in Australia.It is a federal law that imposes on all bank issued currency a tax of ten per cent....
  • Central bank
    Central bank

    A central bank, reserve bank, or monetary authority is the entity responsible for the monetary policy of a country or of a group of member states....
  • Note Printing Australia
    Note Printing Australia

    Note Printing Australia , which is located in Craigieburn, Victoria, Melbourne, is a wholly owned subsidiary of the Reserve Bank of Australia and was corporatised in July 1998....
  • Official Cash Rate
    Official Cash Rate

    The Official Cash Rate is the interest rate paid by banks in the overnight money market in Australia and New Zealand. Through the regulated use of Exchange Settlement Accounts, a central bank is able to adjust the interest rates of a nation's economy....
  • Royal Australian Mint
    Royal Australian Mint

    The Royal Australian Mint is situated in the Australian federal capital city of Canberra, in the suburb of Deakin, Australian Capital Territory....


External links