RBA announces 2 promotions

Dr Penelope Smith and Andrea Brischetto have been promoted to new roles at the Reserve Bank of Australia (RBA).

Dr Smith will be replacing Dr Alexandra Heath as the head of international department in the financial markets group. Ms Heath is now on secondment to the Commonwealth Treasury.

As head of international department, Dr Smith will be responsible for the RBA’s foreign exchange operations, investments of international reserve holdings of gold and foreign exchange, along with regularly advising on developments in international financial markets to the governors and the RBA board.

Her department is also in charge of maintaining the RBA’s relations with several major international institutions.

Meanwhile, Ms Brischetto will be replacing Dr Jonathan Kearns as head of financial stability department in the financial system group, following his transfer to head of domestic markets.

Ms Brischetto’s new role will see her analysing the implications for financial system stability of developments in the macro economy, financial markets and the greater financial sector in general. This includes areas such as patterns of financial intermediation, financial products and risk management techniques.

Her department will provide advice on these issues to the governors and the RBA board as well, along with supporting the RBA’s representation on bodies such as the Council of Financial Regulators, the Financial Stability Board and the Basel Committee on Banking Supervision.

Additionally, the department is in charge of producing the RBA’s semi-annual Financial Stability Review.

Given the two new promotions, the RBA has said it will advertise their resulting vacancies in due course.

The changes to the heads of department come as a review of the RBA’s operations gets underway.

According to the terms of reference for the RBA review, outlined by the federal Treasurer last month, the review will focus on inflation targets, mandates, culture, and board make-up.

Specifically, the review will assess the RBA’s objectives, as outlined in the Reserve Bank Act (1959) and in the Statement on the Conduct of Monetary Policy, including the continued appropriateness of the inflation-targeting framework.

It will also consider its choice of policy tools, policy implementation, policy communication, and how trade‑offs between different objectives have been managed.

The RBA board decided to raise the cash rate earlier this month (August 2022) for the fourth month in a row, bumping up the cash rate by 50 bps, taking the cash rate up to 1.85 per cent.

This marked the first time the central bank increased the cash rate in three consecutive 50-bp hikes, and continued the rising rate cycle that started in May 2022.

The last time the central bank lifted the cash rate by more than 1.75 per cent in a four-month period was in 1994 when the RBA lifted the cash rate twice by 1.0 bp in October and November of that year, following a 0.75-bp lift in August 1994.

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