The Reserve Bank of Australia’s (RBA) main responsibility is monetary policy. Policy decisions are made by the Reserve Bank Board, with the objective of achieving low and stable inflation over the medium term. Other major roles are maintaining financial system stability and promoting the safety and efficiency of the payments system. The Bank is an active participant in financial markets, manages Australia’s foreign reserves, issues Australian currency notes and serves as banker to the Australian Government. The information provided by the Reserve Bank includes statistics – for example, on interest rates, exchange rates and money and credit growth – and a range of publications on its operations and research.
The Reserve Bank of Australia’s (RBA) main responsibility is monetary policy. Policy decisions are made by the Reserve Bank Board, with the objective of achieving low and stable inflation over the medium term. Other major roles are maintaining financial system stability and promoting the safety and efficiency of the payments system. The Bank is an active participant in financial markets, manages Australia’s foreign reserves, issues Australian currency notes and serves as banker to the Australian Government. The information provided by the Reserve Bank includes statistics – for example, on interest rates, exchange rates and money and credit growth – and a range of publications on its operations and research.
Overview Of Functions And Operations
As well as being a policy-making body, the Reserve Bank of Australia (RBA) provides selected banking and registry services to a range of Federal Government agencies and to a number of overseas central banks and official institutions. Its assets, which include Australia’s holdings of gold and foreign exchange, amounted to around A$132 billion at 30 June 2007. The Bank is wholly owned by the Australian Government, to which its profits accrue.
The RBA employed 896 staff at 30 June 2007. Almost 90 per cent of these work in its Sydney headquarters and Business Resumption Site with the remainder in Adelaide, Brisbane, Canberra, Melbourne, Perth, London and New York. Note Printing Australia Limited (NPA) – a wholly owned subsidiary of the Bank – in Craigieburn, Victoria employs a further 258 staff. NPA manufactures Australia’s currency notes and a range of other security products for domestic and overseas markets.
The structure of the Bank is based on groupings of related functions, as follows:
- Economic Group
- Financial Markets Group
- Financial System Group
- Business Services Group
- Corporate Services Group
- Information Department
- Audit Department
- Personnel Department
- Secretary’s Department
- Risk Management Unit
The role and functions of the RBA are underpinned by various pieces of legislation. The RBA is a statutory authority, established by an Act of Parliament, the Reserve Bank Act 1959, which gives it specific powers and obligations. In terms of the Act, there are two Boards: the Reserve Bank Board and the Payments System Board.
The Reserve Bank Board’s obligations with respect to monetary policy are laid out in Sections 10(2) and 11(1) of the Act. Section 10(2) of the Act, which is often referred to as the Bank’s ‘charter’, says:
‘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 of Australia;
(b) the maintenance of full employment in Australia; and
(c) the economic prosperity and welfare of the people of Australia.’
Section 11(1) of the Act covers the need to consult with Government;
‘the Reserve Bank Board is to inform the Government, from time to time, of the Bank’s monetary and banking policy.’
The ‘charter’ of the Payments System Board is defined in section 10B(3) of the Act as follows:
‘It is the duty of the Payments System Board to ensure, within the limits of its powers, that:
(a) the Bank’s payments system policy is directed to the greatest advantage of the people of Australia; and
(b) the powers of the Bank under the Payment Systems (Regulation) Act 1998 and the Payment Systems and Netting Act 1998 are exercised in a way that, in the Board’s opinion, will best contribute to:
(i) controlling risk in the financial system;
(ii) promoting the efficiency of payments system; and
(iii) promoting competition in the market for payment services, consistent with the overall stability of the financial system; and
(c) the powers and functions of the Bank under Part 7.3 of the Corporations Act 2001 are exercised in a way that, in the Board’s opinion, will best contribute to the overall stability of the financial system.’
. "Reserve Bank of Australia." . . Reserve Bank of Australia. 1.31.08 <http://www.rba.gov.au/>.
