This week, The Australian Financial Review revealed that three banks – Westpac, RBC Capital Markets, and Barrenjoey – had been reprimanded by the Reserve Bank for leaks from confidential meetings with the central bank’s officials over the past 18 months.
While the RBA holds these closed-door sessions with a range of stakeholders, including economists and fund managers, to reinforce policy messages and gather feedback, critics argue that the practice creates unfair advantages and should be scrapped.
Betashares chief economist David Bassanese told InvestorDaily that the policy “isn’t a good look” and needs to be reconsidered.
“The RBA says these closed-door meetings are about getting information from other groups in which case it should not be offering an opinion or share sensitive views on its own,” Bassanese said.
“If something is sensitive enough that it should not be leaked, it should likely not be said behind closed doors in the first place.”
AMP’s Shane Oliver, who has attended these briefings in the past, agreed their exclusivity is problematic and suggested they have become redundant.
“This is particularly the case now as the RBA undertakes much more public communications than it used to – particularly with the press conferences and parliamentary briefings – so there are numerous opportunities to explain its position. Which, in turn, makes the private briefings unnecessary,” Oliver said.
As scrutiny mounts, calls to end the RBA’s private briefings are growing louder in the financial community.
Yet, there are those who argue that these meetings still hold significant value, advocating for a thoughtful revision to ensure they resonate with today’s needs, rather than complete elimination.
Speaking to InvestorDaily, GSFM’s Stephen Miller said he can recall attending the meetings hosted by Bernie Fraser back in the 1990s.
“Their purpose was twofold and I don’t think it is to give out private information. In fact, I have never been to one where there was any information offered that you could not have gleaned from public sources. So, there is nothing really nefarious about these,” Miller said.
However, he acknowledged that times have changed since the ’90s and suggested that while private meetings still serve a valuable role, they need reform to address the perception issues – of unequal treatment in particular.
“Now the governor does a press conference at the end of every board meeting, there is obvious transparency that comes from that … One wonders in that context whether there is any need for those private meetings,” Miller said.
“I tend to think that those private meetings still play a valuable role, because I don’t think all the issues are fleshed out necessarily at a conference … But I do think they need to change, because there is a bit of a perception problem and the perception problem is that not everybody is being treated equally.
“The way it’s being done now, while I don’t think there’s anything improper, I think perceptions matter and in the interest of being seen to treat everybody equally, we have to find another way to do this.”
The investment strategist floated the idea of introducing a note-taker at the meetings, with an immediate public release of notes to boost transparency.
Miller also offered another option – scrapping the meetings entirely, suggesting that instead the governor could occasionally attend ticketed business events.
“I think it would be a shame if, in all of this, the RBA was robbed of a dialogue with the marketplace which I think still has some utility,” Miller said.
Speaking to the media on Wednesday, Treasurer Jim Chalmers said he sympathised with the RBA.
“I do share the concern … that some elements of confidentiality may have been breached, and I’m sure that our colleagues at the bank are working through what that means for the way that they conduct those briefings and who’s involved,” Chalmers said.
In February 2023, then RBA governor Philip Lowe faced criticism for attending a private lunch with bank bond traders, skipping the traditional public address after the first RBA board meeting, which he later defended as a diary gap and a response to feedback suggesting he may have been over-communicating.
