After being criticized for not warning the public about impending changes to its key interest rate and slow response to inflation, the Royal Bank of Australia (RBA) will undergo major reforms, including establishment of an interest rate-setting committee and a revamped culture, Australian treasurer James Chalmers announced last week.

In 2020, RBA governor Philip Lowe announced the bank would hold its key interest rate steady until 2024. In May 2022, the RBA suddenly began jacking its key rate, lifting it 10 times through February of this year. 

The rate soared from 0.1 percent to 3.6, stunning millions of property owners holding variable-rate mortgages.

Lowe has apologized for not signaling in advance that rates would be rising, saying the bank had “learned some lessons about how to communicate.”

A government review that began in early summer partly attributed the country’s strong economy in recent years to the bank’s savvy management of monetary policy.

However, it also found the bank to be hierarchical, with staff too often deferring to the wishes of top-level officials. The review also agreed the bank’s communications operation has been poor.

Under the reforms, a panel of experts will set interest rates as they do at the central banks of Canada and the U.K.

The new structure ends a “cozy arrangement” in which professional staff have habitually deferred to the opinions of higher officials, economist Isaac Gross at Monash University told the Financial Times.

“There’s no one to hold them accountable,” he noted.

Lowe accepted many of the review’s recommendations but disputed the findings about the bank’s culture and structure, complaining that they are “not lined up with the reality I know.”

Lowe’s attitude shows he and perhaps other senior bank officers might work to thwart some of the reforms.

“You can only force the RBA to do so much if they’re not on board,” Gross warned.

TRENDPOST: We note this article to again emphasize that, as George Carlin said, “It’s one big club, and you ain’t in it.” And, by their deeds you shall know them: the members of “the club” are arrogant, ignorant, narcissistic freaks and fools running and ruining a country near you.