Greater reach: Bullock at a news conference in Sydney. The Australian central bank is under pressure over its briefings and the RBA now holds a press conference after each policy meeting to provide more context and information about decisions. — Bloomberg
SYDNEY: The Reserve Bank of Australia (RBA) is facing questions over its practice of holding off-record briefings with market participants after reports that at least two such discussions had been leaked, resulting in bans for the institutions involved.
The central bank excluded Royal Bank of Canada from briefings for 12 months to February 2025 after one of its clients shared information from a meeting with assistant governor Chris Kent and also banned Westpac Banking Corp in 2023 for a similar breach.
Both were first reported this week by the Australian Financial Review.
RBA officials regularly hold meetings with groups including traders, economists, business people and community groups to discuss issues ranging from the state of the economy to perceptions of the central bank.
The reports came after former RBA governor Philip Lowe drew criticism early last year when it was revealed he had attended a private lunch with investment bank Barrenjoey Capital Partners.
Lowe, whose seven-year term as RBA chief ended in September 2023, joined Barrenjoey’s board last week.
The leaks are a concern for current governor Michele Bullock as she tries to improve the RBA’s communications and transparency in response to an independent review of the central bank.
Bullock now holds a press conference after each policy meeting to provide more context and information about decisions, which was among the changes recommended by the review.
The RBA declined to comment for this story, though its officials have previously highlighted the benefits of meeting with bankers, employer groups and others.
Stephen Miller, an investment strategist at GSFM, said the only real solution for the RBA was to abandon such briefings.
“It’s a little bit of an overreaction, but unfortunately appearances matter,” he said.
“In a perfect world, you’d keep it, but it’s probably best to abandon them altogether and accept that the governor’s press conferences are a good substitute.”
The Bank of England ceased off-record briefings between members of its rate-setting committee and individual private financial institutions in 2021 after public criticism.
Jonathan Kearns, a former senior RBA official who has attended such briefings, said a better option is for the central bank to be as transparent as possible.
“The RBA should try to operate in a way that minimises the perception that there is private information or favoritism coming through these meetings,” said Kearns, now chief economist at money manager Challenger Ltd.
“Best practice to reduce the perception that these are secret meetings would also be to publish a list of such meetings on their website.” — Bloomberg
