RBA: From Hero to Villain – How Did We Get Here?
The once-stellar reputation of the Reserve Bank of Australia has been greatly diminished due to high inflation, rising interest rates and “own goals.” Governor Philip Lowe’s job has become challenging due to potent domestic and global forces. The RBA was previously sheltered from many changes in global central banking, but change is now coming fast. The government is reportedly equivocating on Lowe’s future, with an independent review of the RBA scheduled for next month. Journalists are writing obituaries for Lowe even as he states his eagerness to serve a second term when his mandate expires in September.
Full Story – Analysis | RBA Goes From Celebrated Hero to Popular Villain
The once-stellar reputation that the Reserve Bank of Australia acquired in a more benign era is greatly diminished. High inflation and rising interest rates are just part of the problem. Some very public own goals have combined with potent domestic and global forces to make Governor Philip Lowe’s job hell. It’s not his role to win popularity contests — and just as well.
For decades, the RBA was revered for a prolonged growth stretch without precedent in the developed world. Successive governments on either side of the partisan divide didn’t have to think deeply about who would its next leader. Just take a deputy governor and promote. While that provided continuity and expertise, especially when coupled with a China-driven boom that few wanted to get in the way of, it meant the institution was sheltered from many of the changes in global central banking. Mainly in communications, but also in governance, structure and outside scrutiny. Change is now rushing in on the governor, his colleagues and the political class from which the bank derives its powers.
The government is equivocating on the future of Lowe, who said last year he wants a second term when his current seven-year mandate expires in September. Treasurer Jim Chalmers, who makes the decision, wants to wait for the results of an independent review of the RBA. The panel is scheduled to report next month. Journalists are falling over themselves to write Lowe’s obituary and handicap…