Central
bank
The Reserve Bank of Australia, Website
www.rba.gov.au a
government agency, came into being on 14 January 1960 as
Australia's central bank and banknote issuing authority,
when the Reserve Bank Act 1959 removed the central banking
functions from the Commonwealth Bank.
The Bank has the responsibility of providing services to the
Government of Australia in addition to also providing
services to other central banks and official institutions.
It currently consists of the Payments System Board, which
governs the payments system policy of the Bank, and the
Reserve Bank Board, which governs all other monetary and
banking policies of the bank.
Both Boards consist of members of both the Bank, the
Treasury, other Australian government agencies, and leaders
of other institutions that are part of the economy. The
structure of the Reserve Bank Board has remained consistent
ever since 1951, with the exception of the change in the
number of members of the Board. The Governor of the Reserve
Bank of Australia is appointed by the Treasurer and chairs
both the Payment Systems and Reserve Bank Boards and when
there are disagreements between both Boards, the Governor
resolves them.
From the middle of the 19th century into the 1890s, the
prospects of a national bank forming grew. In 1911, the
Commonwealth Bank was established, but did not have the
authority to print notes, which was a power that was still
reserved to the Treasury. A movement toward reestablishing
the gold standard occurred after World War I, with John
Garvan leading various boards in contracting the money
supply on the route to doing so, and the gold standard was
instituted for both the British pound sterling and the
Australian pound in 1925.
During the Great Depression, the Australian pound became
devalued, no longer worth the pound sterling, and formally
departed from the gold standard with the Commonwealth Bank
Act of 1932. Legislation in 1945 led to regulation of
private banks which H.C. Coombs was opposed to and when he
became Governor in 1949, he gave them more overall control
over their institutions. When the monetary authorities
implemented the advice of Coombs to have a flexible interest
rate, it allowed the Bank to rely more on open market
operations.
The float of the Australian dollar happened in 1983, around
the same period of time that the financial system in
Australia was deregulated. Administration of the banks was
transferred in 1998 from the Bank to the Australian
Prudential Regulation Authority and the Payments System
Board was created, while the Bank was given power within the
said Board in the same year. The current Governor of the
Reserve Bank is Glenn Stevens, who has been the incumbent
since 18 September 2006
Headquarters Sydney, New South Wales, Australia
Coordinates 33°52′05″S 151°12′42″E / 33.868086°S
151.211749°E / -33.868086; 151.211749Coordinates:
33°52′05″S 151°12′42″E / 33.868086°S 151.211749°E /
-33.868086; 151.211749
Established 1960
Governor Glenn Stevens
Central bank of Australia
Currency Australian dollar
ISO 4217 Code AUD
Base borrowing rate 3.50%[1]
Website www.rba.gov.au
The Reserve Bank of Australia is Australia's central
bank. Its duty is to contribute to the maintenance of price
stability, full employment, and the economic prosperity and
welfare of the Australian people. It does this by setting
the cash rate to meet a medium-term inflation target,
working to maintain a strong financial system and efficient
payments system, and issuing the nation's banknotes. The
Bank provides selected banking services to the Australian
Government and its agencies, and to a number of overseas
central banks and official institutions. Additionally, it
manages Australia's gold and foreign exchange reserves.
A Brief History
In 1911, legislation established the Commonwealth Bank
of Australia. In 1959, this original body corporate was
preserved as the Reserve Bank of Australia (RBA) in
legislation, specifically to carry on the central banking
functions; at that same time, the commercial and savings
banking functions were transferred into a new institution,
which carried on the old name of Commonwealth Bank of
Australia.
With the Federation of the Australian States into the
Commonwealth of Australia, the Australian Parliament assumed
power to make laws with respect to banking and currency. In
1911, the first Commonwealth Bank Act gave the Bank only the
ordinary functions of commercial and savings banking; the
Bank did not specifically have a central banking remit and
it was not responsible for the note issue. Management of the
Bank was vested in the Governor. The Bank opened for
business in mid 1912. At that time, the note issue was
administered by the Australian Department of the Treasury,
which had taken it over from the private trading banks and
the Queensland Government.
In 1920, responsibility for the note issue was transferred
from the Treasury to a Notes Board (consisting of four
members, appointed by the Government). The Governor of the
Bank was ex officio a member of the Notes Board. The
administration of the note issue was undertaken by the Bank,
though the Bank and the Notes Board were formally
independent of each other.
In 1924, the Commonwealth Bank Act was amended and the Bank
was given control over the note issue. Management was then
vested in a board of eight directors, including ex officio
the Governor and the Secretary to the Treasury. From this
time until 1945 (when there were major changes to the
legislation), the Bank gradually evolved its central banking
activities, initially in response to the pressures of the
Depression in the early 1930s and later by formal, albeit
temporary, expansion of its powers under wartime
regulations. These included exchange control and a wide
range of controls over the banking system (including
authority to determine advance policy and interest rates,
and to require private banks to lodge funds with it in
special accounts).
The new Commonwealth Bank Act and the Banking Act, both of
1945, formalised the Bank's powers in relation to the
administration of monetary and banking policy, and exchange
control. Under the 1945 legislation, there ceased to be a
board, which was replaced by an advisory council of six,
comprising entirely officials from the Bank and the
Treasury; the legislation specified that the Governor was
responsible for managing the Bank. However, legislation in
1951 established a new board (at that time of ten members),
including the Governor, Deputy Governor and the Secretary to
the Treasury, and maintained the responsibility of the
Governor for managing the Bank. With minor variations in the
number of members, this has been the structure of the Bank's
Board since that time.
As indicated above, the Reserve Bank Act 1959 preserved the
original corporate body, under the new name of the Reserve
Bank of Australia, to carry on the central banking functions
of the Commonwealth Bank, which had evolved over time; other
legislation separated the commercial banking and savings
banking activities into the newly created Commonwealth
Banking Corporation. The Reserve Bank Act 1959 took effect
from 14 January 1960.
There were no major changes in the functions of the RBA
until the abolition of Exchange Control following the float
of the Australian dollar in 1983. There had, however, been a
gradual movement to market-oriented methods of implementing
monetary policy, away from a system of direct controls on
banks, and in the five years following the appointment of a
major financial system inquiry (the Campbell Committee, in
1979), the Australian financial landscape was transformed to
a virtually fully deregulated system. At the same time, the
RBA gradually built up a specialised banking supervision
function.
Another inquiry into the Australian financial system (the
Wallis Committee) was announced in 1996. There were two
major outcomes of this inquiry for the Bank, both taking
effect from 1 July 1998. The banking supervision function
was transferred from the RBA to a newly created authority,
the Australian Prudential Regulation Authority, which was to
be responsible for the supervision of all deposit-taking
institutions. The Reserve Bank Act was amended also to
create a new Payments System Board, with a mandate to
promote the safety and efficiency of the Australian payments
system. New legislation – the Payment Systems (Regulation)
Act 1998 and the Payment Systems and Netting Act 1998 – was
introduced, giving the Bank relevant powers in this area.
Source:
http://bankingin.com/australia.html
List of banks in Australia
Bank State Branch#List of Bank codes
Central
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