Australia Names Fry-McKibbin, Baker to RBA’s Monetary Board

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(Bloomberg) — Australia appointed Rene Fry McKibben, who was involved in the review of the central bank, and former Bendigo and Adelaide Bank CEO Marnie Baker to the Reserve Bank’s new monetary policy committee.

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Treasurer Jim Chalmers made the announcement on Monday after legislation was passed last month to split the RBA’s board into two entities. Governor Michael Bullock, his deputy Andrew Hauser, and Treasury Secretary Stephen Kennedy will remain on the rate-setting body, as will current members Caroline Hewson, Ian Harper, Ian Ross and Alison Watkins.

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Chalmers said his colleagues Carol Schwartz and Ilana Rubin have agreed to move to the RBA’s new board, and will be joined by new appointees Jennifer Westacott, David Thodey, Danny Gilbert and Swati Dave.

“This means that the majority of positions in both chambers will be held by women,” Chalmers said in a statement. “These appointments will ensure continuity in both boards, consistent with the preferences of the RBA Governor.”

The new boards are scheduled to start from March 1, 2025.

Bullock said earlier this month that she would discuss whether to publish unattributed votes from policy meetings and ask members to give speeches with the new rate-setting board.

In a statement on Monday, the governor welcomed the appointments to the Governance and Monetary Policy Boards. “The expertise and insights of Baker and Frye-McKibbin will be vital as we continue our efforts to bring inflation back on target,” she said.

Economists noted that changes in the composition of the Monetary Policy Committee would increase uncertainty about the future path of interest rates. The Reserve Bank of Australia on Tuesday left the cash rate at 4.35%, marking more than a year at that level. Some economists believe that the first cut will be in February, while others expect May to be the most likely option.

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An overnight interest swap carries a 50-50 chance of interest rates being cut in February, with the cut being fully priced in only in May.

The two new members of the monetary policy board are “largely unknown to markets and most investors,” let alone any sense of where they fit on the hawk-dove spectrum, said Sue-Lin Ong, chief economist for Australia at Royal Bank of Canada.

“The new board and its operations will add some uncertainty to the RBA’s reaction function in 2025 at a time when a change in policy stance is expected, and there is already uncertainty about the timing and scale of a potential easing cycle,” she said. “It will take time to evaluate the new members as well as the four transferred members, and all new board members are expected to make at least one speech/public appearance each year.”

The RBA’s legislation to split the board follows an independent review of the central bank that called for sweeping changes to its operations. Some of these laws were enacted this year including fewer policy meetings and regular press conferences by the governor.

The new members of the Monetary Policy Committee are:

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• Rene Fry McKibben is a professor of economics at the Australian National University who in 2022-23 was one of three panelists to conduct the independent review of the Reserve Bank of Australia. Fry McKibben has been a visiting scholar at the European Central Bank, the Federal Reserve Bank of Atlanta, and the Bank of England. She has been appointed for a period of five years.
• Marnie Baker has 35 years of experience in the financial services industry. She most recently served as CEO of Bendigo and Adelaide Bank and was appointed to a five-year term.

The new members of the Board of Directors are:

• Jennifer Westacott has served as CEO of the Business Council of Australia for more than a decade. She is currently Chancellor of Western Sydney University and has been appointed to a five-year term.
• David Thodey has more than 30 years of experience, including six years as CEO of Telstra and 22 years at IBM Australia. He is currently President of Xero and Chancellor of the University of Sydney. He was appointed for a period of four and a half years
• Danny Gilbert is the co-founder and principal of Gilbert + Tobin, one of Australia’s leading law firms. He has board experience, including serving at NAB, the Australian Business Council and as Chair of the National Museum of Australia. He was appointed for a period of five years.
• Swati Dev served as Managing Director and CEO of Export Finance Australia from 2017 to 2022. She is Chair of the Advisory Board of the Center for Australia-India Relations and was appointed for a term of four and a half years. .

“The appointments are about modernizing the RBA to help ensure it can continue to meet current and future economic challenges,” Chalmers said.

(Adds comment from governor and reaction from economist).

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