A rising number of senior staff quitting Australia’s central bank may prove a “doubled-edged sword” for efforts to overhaul the institution — resulting in both an injection of new talent and a loss of corporate memory, according to former officials and economists.
(Bloomberg) — A rising number of senior staff quitting Australia’s central bank may prove a “doubled-edged sword” for efforts to overhaul the institution — resulting in both an injection of new talent and a loss of corporate memory, according to former officials and economists.
Assistant Governor Luci Ellis’s announcement Monday that she is heading to the private sector after 32 years at the Reserve Bank is the latest move. Other high-profile departures include former Head of Domestic Markets Jonathan Kearns in March after 28 years’ service and ex-Deputy Governor Guy Debelle in early 2022 after 25 years.
The loss of experience adds to the sense of flux at the central bank given the uncertainty over the future of Governor Philip Lowe. Treasurer Jim Chalmers is due this month to announce the next head of the RBA, which may see Lowe extended, or more likely, someone new appointed to the role.
“Long serving staff leaving usually sets in motion a process of evaluation and reprioritization,” said Prashant Newnaha, Singapore-based macro strategist at TD Securities. “Even with the exodus of RBA staff, it does not necessarily make the next governor’s job easier.”
Newnaha highlighted that a major review of the central bank was likely a catalyst for some of the high-profile departures. The RBA’s next chief will be charged with implementing the review’s recommendations, including a new monetary policy committee, fewer interest-rate meetings and press conferences after each one, among other changes.
As a result, while the exit of senior officials opens up positions for new, talented people with different perspectives and thinking, it also implies a loss of experience and corporate knowledge.
“It’s a double edged sword insofar as you’re losing something, but you might gain something,” said Alex Joiner, chief economist at IFM Investors Ltd, which manages about A$217 billion ($145 billion) in assets. “And as the Reserve Bank seeks to refresh its image, that might be a good thing.”
Angela Jackson at Impact Economics echoed Joiner’s view, while adding that Ellis was by all accounts doing an exceptional job and would be a loss.
“The downside is not having her expertise and experience in the organization if indeed somebody new from outside the Reserve Bank does end up being appointed as the new governor,” she said.
Should Lowe receive an extension when his seven-year term expires in mid-September, there’s likely to be less impact from the loss of personnel given his decades of experience. However, if an external candidate takes over as governor, the loss of corporate memory could bring some difficulties.
In addition to Ellis, Kearns and Debelle, the RBA in late 2021 also lost head of Payments Policy Tony Richards after 20 years to retirement; former head of the International Department Alex Heath is on an extended secondment to Treasury; and Adam Cagliarini, deputy head of Payments, is on secondment to the banking regulator.
Yet, the restructuring of the central bank may also provide opportunities for some who left recently to make a comeback, said Peter Tulip, a former senior member of the RBA’s economic research department.
“When we have the new monetary policy board that they’re setting up, all of us would jump at it,” said Tulip, now chief economist at the Centre for Independent Studies. “So there’s a sense the review is going to be reversing some of that exodus.”
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