Reserve Bank of Australia (RBA)
The Reserve Bank of Australia was set up in 1960 and is currently headed by Glenn Stevens. Unlike the SNB, the RBA is wholly owned by the Australian government. It has its corporate headquarters in Sydney, Australia.
Structure of the RBA
The bank is made up of two boards: the Reserve Bank Board (monetary policy and banking supervision) and the Payment Systems Board (management of payment systems policy).
The Reserve Bank board is responsible for monetary policy and supervision of banks operating in Australia. This board is chaired by the Governor of the RBA, and the Deputy Governor serves as the Deputy Chairman of this board. The Payment Systems Board determines the payment policy of banks in Australia. There are other committees which complete the governance structure of the RBA such as the Audit Committee, the Remuneration Committee, the Risk Management Committee and the Executive Committee.
Within the operational structure of the RBA, the bank is split into the following groups: the Banking group, the Payments group, the Currency group, Corporate Services group, the Financial Systems and the Financial Markets group.
Functions of the RBA
The Reserve Bank of Australia has the following functions:
- Monetary policy: maintaining the inflation rate at the set target of 2-3%.
- Control of the printing, issuance, distribution and supply of the legal tender of Australia (the Australian Dollar).
- Regulation of the banking system. Indeed, this was the primary consideration for setting up a central bank in Australia at the beginning of the 20th century.
The RBA is also the official banker of the Australian government and agencies of the Australian government, and also holds the foreign reserves and gold assets of the Australian government.