philip lowe : australia'a bank review speech by mr philip lowe, governor of the reserve bank of australia, at a media briefing, sydney, 20 april 2023. * * * good afternoon. i would like to take this opportunity to welcome the conclusions of the review into the reserve bank and thank the review panel for their excellent work. the review has been timely, with the rba facing an increasingly complex world and operating environment. the recommendations will help us deal with this more complex world and will strengthen the monetary policy process and governance of the rba. the review concludes that the rba has a strong reputation domestically and internationally. it also concludes that we have played an important role in the economic success that australia has experienced over recent decades. the panel also notes that the rba has a highly dedicated and professional staff who are focused on serving the public interest. but as times change, we need to change too. this review will help us do this as we strive to promote the economic welfare of the australian people. i would like to particularly welcome the panel's support for the current monetary policy framework in australia. australia was an early adopter of flexible inflation targeting and this approach has served the country well. the 2 – 3 per cent target range is understood in the community and helps anchor inflation expectations. the flexible nature of the inflation target is also important and the panel has some helpful suggestions as to how we can be clearer about how, and when, this flexibility is used. i would also like to welcome the support for the operational independence of the bank. this is a cornerstone of our monetary policy framework and it is pleasing to see the strong endorsement for independence and the suggestions for strengthening it. it is also pleasing to see the support for the council of financial regulators and the ideas for improving current arrangements. i also welcome the explicit recognition of the bank's long - standing responsibility for financial stability. a major change recommended by the panel is the establishment of separate boards for monetary policy and the governance of the bank. i have thought for some time that there was a strong case to strengthen the governance of the rba as an institution. the rba is responsible for many nationally important functions in addition to monetary policy. these include being the banker to the government, the operator of critically important payments infrastructure, the printer of banknotes and passports, and the manager of australia's foreign exchange reserves. so there is a lot more than just monetary policy. under the reserve bank act 1959, i,

( 2012 ), “ bank regulation and the future of banking ”, remarks to the 41st australian conference of economists, melbourne, 11 july. bis central bankers ’ speeches so, to conclude. there have been a number of significant changes to the structure of financial markets over the past five years, in terms of pricing as well as the composition of funding and lending. regulatory reforms have certainly played a role in those changes, but one of the main points i hope to leave you with today is that the regulatory reforms have often served to reinforce changes resulting from a self - reassessment or resulting from market pressures. while these forces have all been working in the same direction in the current environment, the regulatory reforms will aim to ensure that these changes to a more stable financial structure endure when the environment is less conducive to self - discipline and as market pressures abate. bis central bankers ’ speeches