Australia Names Fry-McKibbin, Baker to RBA Monetary Board

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(Bloomberg) — Australia appointed Renee Fry-McKibbin, who took part in the central bank review, and former Bendigo and Adelaide Bank chief executive Marnie Baker to the Reserve Bank’s new monetary policy committee.

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Treasurer Jim Chalmers made the announcement on Monday following the passage of legislation last month to split the RBA’s board into two. Governor Michele Bullock, Deputy Andrew Hauser and Treasury Secretary Steven Kennedy will remain on the rate-setting committee as will current members Carolyn Hewson, Ian Harper, Iain Ross and Alison Watkins.

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Fellow members Carol Schwartz and Elana Rubin have agreed to transition to the RBA’s new governing board, Chalmers said, and will be joined by new hires Jennifer Westacott, David Thodey, Danny Gilbert and Swati Dave.

“This means that many positions on both boards will be held by women,” Chalmers said in a statement. “This appointment will ensure continuity across both boards, consistent with the RBA governor’s preference.”

The new boards are scheduled to come into effect from March 1, 2025.

Bullock said earlier this month he will discuss whether to publish random ballots at policy meetings and for members to present talks with the new rate-setting board.

The governor, in a statement on Monday, welcomed the appointment of the governing boards and the fiscal policy. “The expertise and insight of Baker and Fry-McKibbin will be critical as we continue our efforts to return inflation to our target,” he said.

Economists have warned that changes in the composition of the monetary policy committee will raise uncertainty about the future path of rates. The RBA on Tuesday left its cash rate at 4.35%, marking more than a year at that level. Some economists see the first cut in February while others predict May as the most likely.

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Overnight swings mean a 50-50 chance of a February cut with only a May cut.

Su-Lin Ong, chief Australian economist at Royal Bank of Canada, said the two members of the monetary policy board are “largely unknown to the markets and to most investors,” not to mention where they lie on the dove-hawk spectrum.

“The new board and its performance will add some uncertainty to the RBA’s response to 2025 at a time when a change in the policy environment is expected and there is uncertainty about the timing and extent of a potential easing cycle,” he said. “It will take time to evaluate the new members and the four who have passed on as all new board members are expected to deliver at least one public speech/appearance per year.”

The RBA’s decision to split the board follows an independent review of the central bank which called for major changes to its operations. Some of these have been implemented this year including several policy meetings and regular press conferences held by the governor.

The new members of the monetary policy committee are:

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• Renee Fry-McKibbin, a professor of economics at the Australian National University who in 2022-2023 was one of three panel members conducting an independent review of the RBA. Fry-McKibbin has been a visiting scholar at the European Central Bank, the Atlanta Federal Reserve and the Bank of England. He was appointed for five years.
• Marnie Baker has 35 years of experience in the financial services industry. He recently served as chief executive of Bendigo and Adelaide Bank and was appointed for five years.

The new members of the management board are:

• Jennifer Westacott has been the chief executive of the Business Council of Australia for more than ten years. He is currently the Chancellor of Western Sydney University and has been appointed for a five-year term.
• David Thodey has over 30 years of experience including six years as CEO of Telstra and 22 years at IBM Australia. He is currently Chairman of Xero and Chancellor of the University of Sydney. He was elected for a term of four and a half years
• Danny Gilbert is the founder and chairman of Gilbert+Tobin, one of Australia’s leading law firms. He has board experience, including NAB, the Business Council of Australia and as Chair of the National Museum of Australia. He was appointed for five years.
• Swati Dave served as managing director and CEO of Export Finance Australia from 2017 to 2022. He chairs the Advisory Board of the Center for Australia-India Relations and is appointed for a four-and-a-half-year term. .

“The appointment is about modernizing the RBA now to help ensure it can continue to meet our current and future economic challenges,” Chalmers said.

(Adds comments from governor, economist reaction.)

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